Journalizing and Posting Adjusting Entries

Open Ended

“What’s Wrong With the Books?”

After completing the Work Sheet, Jordan, the owner of Harbor Tech Repair, notices the accounting records reflect no Adjusting Entries.

The Supplies Expense account in the General Ledger shows $0.00, even though the supply cabinet is half empty.

The company used one month of a 12‑month insurance policy, but Insurance Expense still shows $0.00

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What do you think is causing these problems?

Which accounts need to be updated?

Why can’t Jordan wait until next month to fix them?

Multiple Choice

The balance in Supplies Expense after adjusting entries are recorded represents the amount of supplies used during the fiscal period.

• True

• False

Multiple Choice

Adjusting entries must be posted to the general ledger accounts.

• True

• False