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Bookkeeping All-in-One For Dummies, 2nd Edition
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Bookkeeping All-in-One For Dummies, 2nd Edition

by Lita Epstein, John A. Tracy
August 2019
Intermediate to advanced content levelIntermediate to advanced
608 pages
15h 28m
English
For Dummies
Content preview from Bookkeeping All-in-One For Dummies, 2nd Edition

Chapter 6

Adjusting the Books

IN THIS CHAPTER

Bullet Making adjustments for noncash transactions

Bullet Taking your adjustments for a trial (balance) run

Bullet Adding to and deleting from the Chart of Accounts

During an accounting period, your bookkeeping duties focus on your business’s day-to-day transactions. When it comes time to report those transactions in financial statements, you must make some adjustments to your books. Your financial reports are supposed to show your company’s financial health, so your books must reflect any significant change in the value of your assets, even if that change doesn’t involve the exchange of cash.

If you use cash-basis accounting, these adjustments aren’t necessary because you record transactions only when cash changes hands. Accrual and cash-basis accounting are discussed in Book 1, Chapter 1.

This chapter reviews the types of adjustments you need to make to the books before preparing the financial statements, including calculating asset depreciation, dividing up prepaid expenses, updating inventory numbers, dealing with bad debt, and recognizing salaries and wages that haven’t yet been paid. You also find out how to add and delete accounts.

Adjusting All ...

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Publisher Resources

ISBN: 9781119592907Purchase book