Journal entries: Adjusting, closing and correcting

Year-end work: accruals and deferrals, depreciation, allowances, the VAT settlement, closing entries and corrections of wrong postings.

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The entries

1. Accruing revenue earned but not yet invoiced
2. Accruing electricity not yet invoiced at year end
3. Recognizing unearned revenue at year end
4. Adjusting prepaid insurance at year end
5. Year-end straight-line depreciation
6. Adjusting office supplies to the year-end countNot in: Germany (generic accounts)
7. Adjusting the allowance for doubtful receivables to its required balance
8. Accruing interest on a customer’s note at year end
9. Recording inventory shrinkage at year endNot in: Spain (PGC 2007), France (PCG 2025)
10. Closing the revenue accounts to Income Summary
11. Closing the expense accounts to Income Summary
12. Closing net income to Owner’s Capital
13. Closing a net loss to Owner’s Capital
14. Closing Owner’s Drawings to Owner’s Capital
15. Reversing an accrued bonus at the start of the year
16. Correcting a customer payment posted to the wrong account
17. Correcting an insurance payment recorded at the wrong amount
18. Settling VAT for the periodNot in: United States (US textbooks)
19. Recording the income tax for the year
20. Closing revenues and expenses directly to Retained Earnings

Other topics

• Starting the business
• Buying goods and supplies
• Selling goods and services
• Fixed assets
• Expenses and payroll
• Cash and bank
• Notes and loans
• Inventory and cost of goods
• Corporations and equity
• Multi-step scenarios