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Account adjustments or Financial Account Adjustments are otherwise known as adjusting entries. At the end of an accounting period, in order to bring account balance up-to-date, the entries are made in the journal. Financial Account Adjustments are a result of internal events, whereas the entries made to the general journal are a result of business transaction. Generally, we define internal events as, the events occurring in the business without involving an exchange of goods or services with other entities. Basically the adjustment is made for the things which have not been recorded or for the changes that have appeared after the entry of the original journal. There are various purposes of adjusting the financial accounts are given by Adjustment in Financial Accounting Assignment Help such as the to be revenue that is earned in this period, the to be assets that we have in future benefits at the end of the period, the liabilities that have to be earned at the end of the period, the expenses that have to be incurred during the end of the period, etc.
Reasons of Financial Accounting Adjustments and When They Should Occur
The following are the common reasons for the Financial Accounting Adjustments which are given by Adjustment in Financial Accounting Assignment Help: –
1. An unpaid expense was not recorded for which the Financial Accounting Adjustments was made.
2. The supplies were being used up during that particular period.
3. The prepaid expenses were being used up with the passage of time.
4. The Financial Accounting Adjustments was made in order to earn the interest revenue over the long term receivables.
5. During the period of Financial Accounting Adjustments, the plants and various equibments were being used.
6. An unrecorded service was being provided before the introduction of Financial Accounting Adjustments.
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- The Financial Accounting Adjustments occur under the following circumstances which are given in details by Adjustment in Financial Accounting Assignment Help: –
1. Creation of a prepaid expense that must undergo reduction and the recording of the expense when the asset is used up. This situation arises when before giving to the company the payment is given to the service.
2. After paying to the company when the payment is made for the services then the liabilities and expense are recorded as the entry has not been recorded because no cash payment has been made.
3. Before receiving the goods or service by the customer, the company has been paid for the same goods or services.
4. This also occurs when the customers have received the goods and services and thereafter the payment is made to the company and the goods were not recorded when shipped.
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