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Class 11 and Class 12 commerce students, and CA Foundation aspirants, studying Financial Accounting.

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6 Types of Adjusting Entries Explanation with Example

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Quick Overview & Key Takeaways

Focus Topic:6 Types of Adjusting Entries Explanation with Example

Estimated Reading Time:6 mins

Today we will cover the all entries which are not recorded in the books of accounts known as Adjusting Entries. Introduction to Adjusting Entries According to…
Syllabus-aligned study material with detailed definitions, formats, and practical examples.
Interactive check: Includes a custom practice quiz at the bottom of the article to self-evaluate knowledge.

Introduction to Adjusting Entries

accrual concept

Type of Adjusting Entries:

Outstanding/Accrued Expenses.
Prepaid/Deferred Expenses.
Accrued/Outstanding Income
Pre received/Deferred Income
Depreciation
Provision and Reserve

1. Outstanding/Accrued Expenses: -

For ExampleSolution:

Note: If you did not know how to apply this rules of accounting please check this link https://tutorstips.com/golden-rules-of-accounting

Salary -> Expense a/c -> Nominal rule ->Expense met by Business -> Debit Outstanding Salary -> Representative person -> Personal rule -> giver - > Credit

Adjusting Entries - Outstanding Expenses

2. Prepaid/Deferred Expenses.

For Example:Solution:Insurance -> Expense a/c -> we had given extra Debit to this account so, now -> Credit it. Prepaid Insurance -> Representative person -> Personal rule -> Receiver - > Debit