Chapter 3: Adjusting Accounts

CONCEPT C1

Periodic Reporting & Accrual Basis

Why we adjust: Timing is everything.

ANALYSIS A1

Profit Margin Analysis

Measuring the profitability of sales.

PROCEDURE P1

Adjusting: Prepaid Expenses

Drying up assets as they are used.

PROCEDURE P2

Adjusting: Unearned Revenues

Recognizing revenue as it's earned.

PROCEDURE P3

Adjusting: Accrued Expenses

Recognizing owed expenses.

PROCEDURE P4

Adjusting: Accrued Revenues

Recognizing earned but unbilled revenue.

PROCEDURE P5

Financial Statements from Adjusted TB

Finalizing the reports.

PROCEDURE P6

Prepaid Expenses Alternatives

Appendix 3A: Different ways to record prepaids.

🎮 INTERACTIVE

Interactive Learning

Account Classification Matching Game - Accounting Elements Challenge!

🎯 PRACTICE

Practical Case Simulation

Apply year-end adjusting entries in a realistic scenario!