1. Perhaps the best way to describe an adjusting entry is by means of an example.

2. Adjusting entries are based upon the concepts of accrual accounting.

3. Third, make adjusting entries , journalize and post them in ledger accounts.

4. Through journalizing and posting adjusting entries, the income statement and the balance sheet will reflect the proper operating results and financial position at the end of the accounting period .

5. Nevertheless, all adjusting entries fall into one of the following four categories.

6. The adjusting entries can be recorded in the journal when they are entered on the work sheet[/adjusting entries.html], but it is not necessary to journalize them at the same time.

7. This trial balance is prepared before the adjusting entries are made; therefore, it is often called the unadjusted trial balance. A trial balance lists each account with its debit or credit balance.

8. Adjusting entries are made in the general journal and posted to the related ledger accounts.

9. Therefore, it is necessary to make the adjusting entries at the end of an accounting period.

10. Making end - of - period adjusting entries, journalizing and posting them in ledger accounts.

11. Financial statements are discussed in more detail in later lessons. Step 7. Journalize and Post Adjusting Entries.

12. The unadjusted trial balance must be adjusted to in corporate the effects of all of the adjusting entries.