A Complete Guide to Adjusting Entries

[@AccountingStuff]

Which of the following best describes Deferred Revenue? a) Revenue that has been earned but not yet received b) Payments received in advance for Revenue that hasn't yet been earned c) Revenue that will not be earned in the future d) Revenue from completed sales 🔗 ADJUSTING ENTRY PRACTICE QUESTIONS Quiz 1: kzbin.infoHB5jOL0ei8Q Quiz 2: kzbin.infoEwhTEZoDKw8 Quiz 3: kzbin.infoqs-ZgnHX7Ig ⏱TIMESTAMPS 00:00 - Intro 00:44 - What are Adjusting Entries? 08:14 - Prepaid Expenses 16:58 - Deferred Revenue 26:11 - Accrued Expenses 37:48 - Accrued Revenue

[@akshatpathak7962]

Option B I think I haven't watched the video yet

[@AccountingStuff]

@@akshatpathak7962 Correct! Deferred Revenue is also known as Unearned Revenue or Prepaid Revenue :)

[@jfdd43]

A good video idea would be to show how the logistics of all this works. For example, in the airplane example, what systems are used to track how and when to move stuff from the deferred payments account into the revenue account. With multiple clients this can easily become confusing

[@AccountingStuff]

@@jfdd43 Great idea!

[@lourdesgarcia2969]

Bbbbbbbbbbbbbbb

[@adriannehipolito6672]

i have exams coming up in 2 days. i owe a good chunk of the things i learnt from you. Amen

[@AccountingStuff]

Best of luck!

[@kingtigercrownestate9102]

Thoughts on A.I. doing all this sooner or later and humans no longer being needed?

[@marcofebrianofficial3637]

I came here just after graduating from highschool I think I owe you so much I don't know how I would be without you I've learned accounting since year 9, however I don't understand anything at all and didn't listen to the teacher at all, I even cheated for the exam and still failed horribly until in year 10 where one of my classsmates decided to ask me lots of questions about accounting thats when I decided to catch up I learn how to write financial statements at school without even knowing what it is and didn't understand anything about the ledgers and journals which is where I found this channel and I subscribed while learning the basics also helped by one of myfriend whom got the highest in Accounting be friends with those your opposite😅 well my friends ends up getting an award as the highest marks in the whole country I continued to learn until I got to finnish my year 10 exam and got to skip straight to year 12 abroad just from my accounting and math marks, 2 subjects thats always one of my wotse subjects then I learned in year 12 abroad and I just graduated last week I also got an award for getting the highest in Accounting being the subject with the lowest average but my marks is one oof the highest out of all top marks students from each subjects at school I got 90% in my exam and the average was 44% somehow I was the only one in class whom got above average marks with almost 50% difference😅 after 3.5 years of learning accounting finally experience being thhe highest in class, never experienced it before with other subjects 3.5 years of learning and 2.5 years of hardwork to get from the worse marks in class to the highest marks in class from D with cheating to A* in 1 year such a wonderful journey I plan to get a degree in Accounting for university I won't be here without this channel you're the only one who teach me all the basics until finally my friend is willing to teach me I continued to watch this chamnel until today

[@AccountingStuff]

Thanks for sharing your story! I sounds like you have a bright future ahead of you. All the best :)

[@MollieWatkins-m4n]

Literally could not have posted this at a better time. Thank you!

[@AccountingStuff]

Hope you find it useful!

[@mills3734]

Just want to say thank you so much for all the videos you make. 2 years ago in my first intro accounting class I was lost until I found your original adjusting entry video. Thanks to your videos at the time I was able to do really well in that class and even switched my major to accounting. I even have a big4 internship and I’ll be going to get my masters in accounting next fall after graduating this spring! I seriously wouldn’t be where I am today without this channel, thank you so much

[@AccountingStuff]

Congrats on landing your internship at the Big 4! That's a great achievement. All the best on your journey :)

[@DavidPereiraLima123]

I just clicked this video by mistake, but I'm leaving a comment because it's a crime how your channel is underrated.

[@AccountingStuff]

I appreciate it! Thanks :)

[@GBLisa]

@@AccountingStuff You are the best teacher in the world.

[@AccountingStuff]

@@GBLisa That's kind of you to say!

[@flyingmintbunny1286]

Thank you man! I wirk as a receptionist in an accountants and was recently asked if i wanted to start learning, my boss does not make a good teacher.. but holy hell you do!! Thank you for making this free for all of us! :)

[@AccountingStuff]

Best of luck in your studies :)

[@osamashibeka1562]

I've been watching ur videos since that 6 years ago accounting equation video, back then i didn't have a clue to what should i do in my career, started to watch ur videos and i liked how u make accounting seems fun and simple, because of u i've recently passed my CMA part one exam and sitting for part two next month, i owe u my career man! and btw although all these videos are like basics for me now but i never miss a single video u post, keep up the good work james, ur truly making a difference mate!

[@AccountingStuff]

Congrats on passing your exam! Sounds like you're well on your way to getting your CMA which is great news. All the best :)

[@sheikhasifa8701]

You are the best teacher. Your videos are incredibly helpful, clear and easy to understand. Your content has been a game-changer for me. And I would like to learn more about IFRS rules from you, as they are becoming increasingly important in the industry. Thanks for making such valuable content accessible to everyone.

[@AccountingStuff]

Thanks for your feedback! Great to hear you're finding these videos useful :)

[@RoyRefael100]

He is such a good teacher, if all my teachers were like him in school i would be genius

[@AccountingStuff]

Thanks, great to hear you're finding my vids useful :)

[@mrt7948]

You don't need to go-to school.

[@Lovelydelilahdd]

Omg.... the universe has aligned!! I'm at this exact chapter 🎉🎉🎉🎉 thank youuuuuuuuu ❤❤❤❤❤

[@AccountingStuff]

Perfect timing!

[@NabeelZaheer-rt7bc]

I have been taking accounting classes recently.. and this is such a life saver! You are truly underrated.. my teacher explained a bit of it for a whole class and I didn't understand a thing.. you just made it so much simpler for me.. Thank you so much!

[@AccountingStuff]

Hope it's making sense :)

[@kingtigercrownestate9102]

Think A.I. is going to take over all this?

[@fireflower_dusk]

I think I speak for all of us just starting an accounting class when I say I NEEDED THIS

[@AccountingStuff]

Best of luck with your studies!

[@Chris.tina_Rosa]

Your page has been a lifesaver! TOP TIER CONTENT. Thank you!!!!!

[@AccountingStuff]

Thanks, great to hear you're finding these useful!

[@saraicote7838]

Thank you I’m an accounting student and have been feeling confused and lost in the books! Your videos are amazing

[@AccountingStuff]

No problem! Best of luck with your studies :)

[@haebomplaylist3838]

Omg your a life saver our topics just this week is all about adjusting entries I do have a book to read but still I don’t understand anything at all not until I saw your video ❤❤

[@AccountingStuff]

Hope it's clicking for you :)

[@Lotetree-olivepalm]

Please keep posting. These videos are really helpful. 😊

[@AccountingStuff]

Thanks, will do!!

[@krissolike]

I was having a hard time with understanding this topic at uni, so thank you for making it clear and pretty easy to get it! Subscribed for future videos:)

[@AccountingStuff]

Great to have you on board!

[@YuMa-i8n]

Do you know how helpful your videos to a student major in accounting!!!😽

[@AccountingStuff]

Glad to hear it! All the best with your studies :)

[@daniellejanae1027]

The best teacher on KZbin!! 🎉

[@AccountingStuff]

Thanks! I appreciate it :)

[@khandynourijkamouelle9760]

Hey James Please cost accounting and taxes ❤️❤️❤️❤️❤️ Your videos are too good

[@AccountingStuff]

Thanks for your request!

[@ElliaTenggren]

you posted this right in time to save me, thank you I love you

[@AccountingStuff]

No problem! Hope it's clicking for you :)

[@Joshhsoj]

Man, I wish I could transfer my tuition to you because you've taught me way more than my professor

[@AccountingStuff]

Haha, no need for that! Great to hear you've been finding these vids useful. All the best with your studies :)

[@Atulmorereaction911]

Hello I am indian ❤ your video is great 🎉

[@AccountingStuff]

Hey there!! Great to hear you found this useful :)

[@JimmyLeeJr]

Perfect video, after studying this I've already gained 2" in height and lost 4" around my waist. My accounting professors are useless.

[@AccountingStuff]

Great to hear it's clicking for you :)

[@gitsannjuguna6250]

My favourite class in high school

[@AccountingStuff]

Really? That's great to hear :)

[@aamnaaslam5487]

Awesome video as always. Keep it up!

[@AccountingStuff]

Thanks, glad you enjoyed it!

[@flinkymatawaran]

Thank you for the clarifications!!

[@AccountingStuff]

You're very welcome :)

[@christineamuge]

Awesome James I think this time will pass my exam😅

[@AccountingStuff]

You've got this!

[@Jenn-st7li]

Your videos are amazing!

[@AccountingStuff]

Thanks! Hope you learned something :)

[@MaritzaTrochez-o3u]

Hello do you have a video on payroll?? if not can you make one please i love watching your videos they are so easy to understand definitely my favorite channel to watch!!!

[@AccountingStuff]

Thanks for your request! I'll keep this in mind for a future video :)

[@TheRobbo007]

Love the videos! 👍🏻 Would you be able to upload a video on how to account for free rent periods?

[@AccountingStuff]

Thanks for your request!

[@kiizukiti]

Do you have videos on group accounting ?

[@AccountingStuff]

Not yet... but I'll keep it in mind for future videos :)

[@simphanyYT]

OMG JAMES! Perfect 👏🏽timing👏🏽

[@AccountingStuff]

Great to hear! Hope you find it useful :)

[@simphanyYT]

@@AccountingStuff yes thank you

[@crystalmccall7517]

Hello, your videos are great! Do you have a video on valuation of receivables (direct write-off, ADA, allowance method based on sales)?

[@AccountingStuff]

Not yet, but thanks for your request!

[@juliequezada2385]

Quick Question: T Accounts allow are subjective to sub accounts that can allow deprecation ?

[@AccountingStuff]

Sorry, I don't quite understand what you're asking here... could you clarify?

[@BigBoiKaii]

Thank you sooo much i have an exam

[@AccountingStuff]

No problem, best of luck!

[@muhammedsafvan1968]

Can you make a video about account receivables ?

[@AccountingStuff]

Thanks for your request!

[@boyrobloxian6420]

hi james i love this video

[@AccountingStuff]

Thanks! Great to hear you found it useful :)

[@TheFinanceBrew888]

Thank you very much!

[@AccountingStuff]

You're very welcome :)

[@Smartowl11493]

Absolute legend

[@AccountingStuff]

Thanks

[@izzybun]

please make a video about cash book and petty cash book

[@AccountingStuff]

Thanks for your request!

[@susmicamaddiptati3815]

Deferred and Accrued revenue entry on Quickbooks, please post and show how it works.

[@AccountingStuff]

Thanks for your request!

[@Chris.tina_Rosa]

Dish out the money to get the cheat sheets. They will save you. Follow along with his cheat sheets in hand and you will be golden!

[@AccountingStuff]

Glad you're finding them useful!

[@lourdesgarcia2969]

Hello James first i want to say u are awesome!!!! this might be a little long but can you help me I'm grappling with this if in November and December you declared $100 expenses and those got closed out... $153 invoiced expense matches decrease in cash i understand this but how do you go back and correct those $100 journal entries after theyve been closed?

[@lourdesgarcia2969]

In January the expense is only $53, so equity or retained earnings has to go up by $100 (because Nov n Dec expenses was closed out to income summary and retained earnings) because full payment being made in January, (new period) of $153

[@lourdesgarcia2969]

Last period November and December you close it out and took the money out of retained earnings so in this new period in January you give it back to retained earnings and pay the whole thing from cash when u get the invoice. Also the expense for January was only $53

[@lourdesgarcia2969]

Credit cash $153 Debit expenses $53 Credit retained earnings $100 Bcs in Nov and December those accrued expenses $50 each month equaled $100 and they were not paid, no invoice, but were closed out to retained earnings. So u give it back to retained earnings and pay full invoice amt. Of $153 (from cash acct.) And the expense for Jan. Is $153 - $100(Nov. N Dec )= $53 expense for January.

[@lourdesgarcia2969]

Ok. NVM. I thought u couldn't make the adjusting entries in following period, after accounts were closed but that is exactly why we make adjusting entries to correct the expense or revenue and retained earnings. Sorry about the mixup!

[@ankitasaurav2258]

Hi, Can you make videos about IFRS.

[@AccountingStuff]

Thanks for your request!

[@femkhan]

hi can you make a video on irrecoverable debts as well as what is control accounts

[@AccountingStuff]

Thanks for your requests!

[@femkhan]

@@AccountingStuff your most welcome☺

[@adarshpandey3905]

Sir we file tax return of business on a cash basis so we have to do adjustment on a cash basis

[@intatreacy4439]

Thanks

[@AccountingStuff]

Legend! Thank you

[@Parvezprabhu]

Bro please explain consignment journals it's very complicated!

[@aamirmumtaz1093]

plz make a video on IFRS 16 Leases

[@AccountingStuff]

Thanks for your request!!

[@getit2333]

I am a management student. But sometimes i really think - why should we learn accounting because everything is automatic now, there is machine learning, AI, and very advanced software's. Why are we still studying accounting as a subject. Please correct me if i am wrong.

[@Daylan_S]

Becaues even AI can make mistakes. It's a programed language. Not only that but sometimes when systems are down, rare, you still have a job to do, and need to be able to do it manually. Also, you have to know the foundations like how to adjust entries, what is a liability versus an asset, how to account for various business etc.. you can't soley rely on AI and say that looks great, you have to be able to fact check and verify the information is correct. I think AI is a good tool to work hand in hand with but using it to automate all the task of accounting, is not feasable right now.. it will make mistakes.

[@getit2333]

@@Daylan_S may be not today or maybe not tomorrow but one day AI will definitely replace Accounting subject in our schools because it is getting better and better each and every day and very fast. My career is at risk. I regret choosing management (commerce) as my major subject. Science was much better

[@getit2333]

@@amelioratepsych yep, that is true. But the difference is -- degree of risk associated with any skill, degree or course. Which is ofcourse higher in our case. This is what I mean.

[@AccountingStuff]

Automated systems can help you process data, but management students still need to understand how accounting works. Management roles often require making decisions that affect the financial health of a company. So it's important that you can read and interpret Financial Reports

[@lourdesgarcia2969]

Also for fi ding mistakes if when that is possible. Accounting is language of business! Business without accounting is a very messy room or attic!!

[@Agaicha100]

Hello Sir, concerning prepaid expenses, what is the point to debit insurance expenses for just 12 days ( at the 18 th of dec) and then credit it at the end of december and debit prepaid expenses for the same amount. Why we did not debit prepaid expenses at the 18 th of december for once.

[@AccountingStuff]

We want Expenses to be recorded as they are incurred :)

[@Agaicha100]

@AccountingStuff thank you 🙏🙏🙏👏👍

[@AccountingStuff]

@@Agaicha100 No problem!

[@md.tofaelahmed8243]

Why Insurance Expense is debit in JE1 but credit in JE2. I don't understand

[@AccountingStuff]

Which part of the video are you referring to?

[@md.tofaelahmed8243]

In Prepaid Expenses part from 11:00 minutes to 12:40 minutes.

[@AccountingStuff]

@@md.tofaelahmed8243 Ahh.. the initial journal entry recorded the transaction on a cash basis and recorded the entire Insurance Expense at the moment the payment was made. A correcting entry was then posted to transfer the balance out of Insurance Expenses (in the Income Statement) to Prepaid Expenses (an Asset in the Balance Sheet). From then on, the cost of the Insurance Expenses is allocated to the Income Statement month-by-month as it is incurred.

[@MusicInMae]

Could you do one for leases?

[@AccountingStuff]

Thanks for your request!

[@AleeBebop182]

Just like it already because i know, will learn something at the end of the video since it's come from you. 😊

[@AccountingStuff]

Hope you found it useful :)

[@dooniAbdisa]

y

[@AccountingStuff]

?

[@kingtigercrownestate9102]

Will all accouting soon be done entirely by A.I.? PROBABLY later if not sooner especially with very large global organizations with very complicated cash flows as soon as the bosses can fire very costly and error prone human accountants and use FREE A.I. that is NOT subject to human error or human issues such as needing vaction time, getting sick, going on strike demanding wage increases, forming a union...as SOON as A.I. can get rid of all that human accouants are GONE and most importantly to these corporations is that machine does NOT have to be paid any money so the corporations and businesses get to keep alot more of it to themselves it is COMING. Computers replaced most all humans on the trading floors in Chicago and New York years ago and computers will continue replacing humans wherever else possible and accouting is PERFECTLY possible to be done entirely by a smart machine (A.I.) as soon as the advacement of the technology allows for it A.I. will be much smater and FASTER than any human what it takes a human accountant at least a couple hours to probably do on the books A.I. will probably be able to do perfectly in a nanosecond flat and be DONE and not require to be paid anything.