Adjusting journal entries is made at the end of an accounting period to

Adjusting journal entries are made at the end of an accounting period to:

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1. Match revenues and expenses to the correct period (matching principle)

2. Ensure accurate financial reporting

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Common adjusting journal entries booked during month-end close:

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1. Prepaid Expenses:

??? - Debit: Expense (e.g., Rent Expense)

??? - Credit: Prepaid Rent (asset)

??? - Reason: Allocate prepaid expenses to the correct period

2. Accrued Expenses:

??? - Debit: Expense (e.g., Wages Expense)

??? - Credit: Accrued Wages (liability)

??? - Reason: Recognize expenses incurred but not yet paid

3. Accrued Interest:

??? - Debit: Interest Expense

??? - Credit: Accrued Interest (liability)

??? - Reason: Recognize interest incurred but not yet paid

4. Depreciation:

??? - Debit: Depreciation Expense

??? - Credit: Accumulated Depreciation (contra-asset)

??? - Reason: Allocate asset cost over its useful life

5. Inventory:

??? - Debit: Cost of Goods Sold

??? - Credit: Inventory (asset)

??? - Reason: Match cost of goods sold to revenue

6. Deferred Revenue:

??? - Debit: Deferred Revenue (liability)

??? - Credit: Revenue

??? - Reason: Recognize revenue earned but not yet received

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These adjusting entries ensure accurate financial statements and compliance with accounting standards.

It may vary company to company and business to business ( presented for learning purpose only)