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Introduction to the Adjustment Process

6 May, 2015 - 17:39

At the end of a financial period, many balances listed in the trial balance are in need of some adjustment. Common adjustments pertain to prepaid expenses, plant assets, and accrued expenses. If the proper adjusting entries are not made, financial statments will be incorrect. It is not necessary to keep track of transactions that affect revenues and expenses on a day to day basis. Adjustments should be made at the end of each accounting period.