Concept Check No.1

Why do we adjust journal entries?

Arrange in order the journalizing process.

• Write with indention the credit account title under account and explanation column after the debit account title/s.

• Write the debit account title on the left most part under account and explanation column.

• Write the credit amount on the credit column.

• Fill out the date column.

• Write the debit amount on the debit column.

PREPAID RENT ​ ​ (a)  

ALLOWANCE FOR BAD DEBTS​ (b)   ​ ​

UNEARNED REVENUE ​ (c)  

• DR:RENT EXPENSE, CR: PREPAID RENT
• DR:BAD DEBTS EXPENSE, CR: ALLOWANCE FOR BAD DEBTS
• DR:UNEARNED REVENUE, CR: SERVICE INCOME

Match the following account titles to its respective major accounts

• Expense

• Unearned Income

• Liability

• Utilities Expense

• Asset

• Prepaid Expense

• Owner's Equity

• Professional Fee

• Income

• Owner's Drawing

Adjusting entries are recorded at the beginning of the accounting period before the trial balance is prepared to reflect the correct balance of the accounts.

• TRUE

• FALSE

1. Rent expired during the month is Php 3,150. The original amount was at Php 15,000. How will the adjusted entry look like?

• Dr: Prepaid Rent Php 3,150.

  Cr: Rent Payable

  1. Php 3,150.

• Dr: Rent Expense Php 3,150.

  Cr: Rent Payable

  1. Php 3,150.

• Dr: Rent Payable Php 3,150.

  Cr: Prepaid Rent

  1. Php 3,150.

• Dr: Rent Expense Php 3,150.

  Cr: Prepaid Rent

  1. Php 3,150.