Discussion Post: Adjusting Entries
For your initial Discussion post, describe at least two typical adjusting entries a service-type business would need to record to bring account balances up-to-date.
For your examples, one of the adjusting entries should be an accrual and another a deferral. You may use similar examples as those in your textbook and you may also research other typical adjusting entries for service-type companies. Be sure to address the following questions:
1) What are the purposes of each of your example adjusting entries?
2) Why are these adjusting entries required?
3) What if the company does not record these adjusting entries? Would financial statements be accurate? Why or why not?
4) Should the adjusting entries described be posted to the general ledger before preparing an adjusted trial balance? Why or why not?
Beyond the explanations above, post the actual adjusting entries (with accounts, debits and credits) for each of your examples.
For your replies, comment on the differences and/or commonalities between the posted adjusting entries and consider the following questions: Do you agree that these entries must be made before preparing financial statements? What new insight regarding adjusting entries have you gained from your classmates' posts? Support your responses with further research and/or additional adjusting entry examples.