What is the best way to learn Adjusting Entries in Accounting?
Adjusting journal entries: Adjusts accounts directly by increasing or decreasing accountsDirectly impacts the books and records without changing individual transactionsI have made a video to learn Adjusting entries:The key to being good with adjusting entries is mastering first debits and credits:Debit and CreditsDebits and credits is the system used for recording accounting transactions. A debit or credit transaction can increase or decrease balances, depending on the account type (asset, liability, equity, revenue, and expense). This forms the basis for double entry bookkeeping, which requires equal debits and credits. The underlying transactions are recorded in detail on the general ledger and are later combined to form financial statements.The mechanics of the system must be memorized. Once understood, you will be able to properly classify and enter transactions. These entries makeup the data used to prepare financial statements such as the balance sheet and income statement.Every accounting transaction involves at least one debit and one credit. The sum of debits and the sum of credits for each transaction and the total of all transactions are always equal. A list of all transactions appears in the general ledger. Debits are always presented before credits.Further to the above you can read up through this link Debits and credits systemHere is my audio lesson and free (for now) ebook dedicated to the subject: APP: 025 Learn Debits & Credits - Accounting PlayAnd a free course that I designed to explain the concept... Accounting Debits and Credits - Accounting Play
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Percent of accounts receivable method L.O. P2 Wecker Company’s year-end unadjusted trial balance shows accounts receivable of $89,000, allowance for doubtful accounts of $500 (credit), and sales of $270,000. Uncollectibles are estimated to be 1.5% of accounts receivable. 1. Prepare the December 31 year-end adjusting entry for uncollectibles. Date General Journal Debit Credit Dec. 31 2. What amount would have been used in the year-end adjusting entry if the allowance account had a year-end unadjusted debit balance of $200? Amount used in the year-end adjusting entry $ Percent of sales methods L.O. P2 3.) Wecker Company’s year-end unadjusted trial balance shows accounts receivable of $89,000, allowance for doubtful accounts of $500 (credit), and sales of $270,000. Uncollectibles are estimated to be 1.0% of sales. Prepare the December 31 year-end adjusting entry for uncollectibles. Date General Journal Debit Credit Dec. 31
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Darius Company's year-end unadjusted trial balance shows accounts receivable of $95,000, allowance for doubtful accounts of $550 (credit), and sales for $350,000. Uncollectibles are estimated to be 1.5% of accounts receivable. 1. Prepare the December year-end adjusting entry for uncolletibles Dr Bad debts expense 875 ($95,000 x 1.5% - $550) Cr Allowance for doubtful accounts 875 2. What amount would have been used in the year-end adjusting entry if the allowance account had year-end unadjusted debit balance of $150? $95,000 x 1.5% + $150 = $1,575 Assume the same facts above, except that Darius estimates uncollectibles as 0.5% of sales. Prepare the December year-end adjusting entry for uncollectibles Dr Bad debts expense 1750 ($350,000 x 0.5%) Cr Allowance for doubtful accounts 1750
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A) If G. K. Reid uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming G. K. Reid determines that L. Gaga's $1,500 balance is uncollectible. Dr Bad Debt Expense 1,500 Cr Accounts Receivable 1,500 B) If Allowance for Doubtful Accounts has a credit balance of $2,400 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 3% of net sales, 856,300 - 31,200 = $825,100 net sales 825,100 x 3% = $24,753 adjustment Dr Bad Debt Expense 24,753 Cr Allowance for Doubtful Accounts 24,753 and (2) 10% of accounts receivable. 129,500 x 10% = $12,950 12,950 - 2,400 credit balance = $10,550 adjustment Dr Bad Debt Expense 10,550 Cr Allowance for Doubtful Accounts 10,550 C) If Allowance for Doubtful Accounts has a debit balance of $310 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1.25% of net sales 825,100 net sales x 1.25% = $10,314 adjustment Dr Bad Debt Expense 10,314 Cr Allowance for Doubtful Accounts 10,314 and (2) 7% of accounts receivable. 129,500 x 7% = $9,065 9,065 + 310 = $9,375 adjustment Dr Bad Debt Expense 9,375 Cr Allowance for Doubtful Accounts 9,375
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14. Tanning Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $200,000 and credit sales are $1,000,000. An aging of accounts receivable shows that 5% will be uncollectible. What adjusting entry will Manning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment? 1. Bad Debts Expense 10,000 Allowance for Doubtful Accounts 10,000 2. Bad Debts Expense 8,000 Accounts Receivable 8,000 3. Bad Debts Expense 8,000 Allowance for Doubtful Accounts 8,000 4. Bad Debts Expense 10,000 Accounts Receivable 10,000
Accounting: Journal entries for the using the write off method, and adjustments. Please help!?
When using the direct write-off method, Accounts Receivable is immediately credited for the write-off. When using the percentage of sales allowance method, the balance in Allowance for Doubtful Accounts is ignored when making the adjusting entry. When using the percentage of receivables allowance method, the CREDIT balance in Allowance for Doubtful Accounts AFTER the adjustment must equal the amount estimated to be uncollectible. If Hixson uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Hixson determines that Fell's $1,400 balance is uncollectible. Dr Bad Debt Expense 1,400 Cr Accounts Receivable--Fell Account 1,400 If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of net sales, and (2) 10% of accounts receivable. Dec 1st (1) (840,000 - 30,000) x 1% = 8,100 Dr Bad Debt Expense 8,100 Cr Allowance for Doubtful Accounts 8,100 Dec 1st (2) 120,000 x 10% = 12,000 12,000 - 2,100 = 9,900 Dr Bad Debt Expense 9,900 Cr Allowance for Doubtful Accounts 9,900 If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75% of net sales and (2) 6% of accounts receivable. Dec. 31 (1) (840,000 - 30,000) x 0.75% = 6,075 Dr Bad Debt Expense 6,075 Cr Allowance for Doubtful Accounts 6,075 Dec. 31 (2) 120,000 x 6% = 7,200 7,200 + 200 = 7,400 Dr Bad Debt Expense 7,400 Cr Allowance for Doubtful Accounts 7,400