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This chapter explains why financial information needs a “check-up” at the end of each period. You’ll learn how adjusting entries update accounts for things like expenses used up, revenues earned, and accruals that haven’t been recorded yet. Then, we’ll prepare an adjusted trial balance, the updated list of accounts that proves debits and credits still match after adjustments. This step makes sure your financial statements reflect the real story.
This chapter explains why financial information needs a “check-up” at the end of each period. You’ll learn how adjusting entries update accounts for things like expenses used up, revenues earned, and accruals that haven’t been recorded yet. Then, we’ll prepare an adjusted trial balance, the updated list of accounts that proves debits and credits still match after adjustments. This step makes sure your financial statements reflect the real story.