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Dec 17, 2025
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Understanding Adjusting Entries and Worksheet Steps in Accounting
Knowunity Philippines
@knowunityphilippines
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Understanding Adjusting Entries in the Accounting Cycle
Think of adjusting entries as the final tune-up your car needs before a big trip - they're essential for making sure everything runs smoothly. These special journal entries happen at the end of each accounting period to update your account balances before creating financial statements.
Adjusting entries ensure that revenues and expenses land in the correct time period, following the matching principle and accrual basis of accounting. Without them, your financial statements would be like a half-finished puzzle - technically complete but missing crucial pieces.
Here's why they're absolutely necessary: during busy periods, some transactions affect multiple months or simply haven't been recorded yet. Picture Jollibee paying three months of rent upfront, or utility bills arriving after the accounting period ends - these situations need adjusting entries to sort them out.
Key Point: Adjusting entries are your safety net, ensuring all revenues earned and expenses incurred during the period are recorded, regardless of when cash changes hands.
Types and Categories of Adjusting Entries
Accrued revenues represent money you've earned but haven't received yet - like a law firm completing work in December but billing in January. You'd debit Accounts Receivable and credit the relevant revenue account to capture this earning.
Accrued expenses work the opposite way - these are costs you've incurred but haven't paid yet. If employees work the last week of December but get paid in January, you need to record that salary expense in December where it belongs.
Deferred revenues happen when customers pay you before you've done the work - think gym memberships paid annually. You start with a liability (Unearned Revenue) and gradually convert it to revenue as you provide the service.
Deferred expenses are payments you've made in advance, like prepaid insurance or rent. These create assets that get expensed over time. Depreciation adjustments spread the cost of equipment and buildings over their useful lives, matching their expense with the revenues they help generate.
Remember: Each type follows the same logic - match revenues and expenses to the periods when they actually occur, not when cash moves.
Worksheet Preparation Fundamentals
An accounting worksheet is like your financial command center - a multi-column spreadsheet that organizes all your accounting data before you create final financial statements. While not legally required, it's an incredibly powerful tool for staying organized and catching errors.
The worksheet contains several paired debit and credit columns: Trial Balance (starting balances), Adjustments (your adjusting entries), Adjusted Trial Balance (updated balances), Income Statement columns (revenues and expenses), and Balance Sheet columns (assets, liabilities, and equity).
Think of worksheets as your financial safety net. They help you organize information systematically, spot errors before they become problems, and provide a clear trail showing how adjustments affect your balances. For Filipino businesses, especially smaller ones, worksheets provide structure during hectic period-end procedures.
Pro Tip: Worksheets serve as your preliminary step before formal financial statements - they let you verify that debits equal credits at every stage and ensure you haven't missed any crucial adjustments.
Step-by-Step Worksheet Preparation Process
Step 1: Enter the unadjusted trial balance - Start by listing all your general ledger accounts with their current balances. Debit balances go in the debit column, credit balances in the credit column. This is your foundation, so double-check that total debits equal total credits.
Step 2: Identify and enter adjusting entries - This is where your detective skills come in handy. Look through your business operations and account balances to spot what needs adjusting. Consider all five categories: accrued revenues, accrued expenses, deferred revenues, deferred expenses, and depreciation.
Enter each adjustment in the Adjustments columns, using letters (a, b, c) to keep them organized. Every adjustment must maintain the accounting equation balance - if you debit ₱10,000 somewhere, you must credit ₱10,000 somewhere else.
Success Strategy: Take your time with adjustments - rushing this step is like building a house on shaky foundations. Each adjustment you make here directly impacts your financial statements' accuracy.
We thought you’d never ask...
What is the Knowunity AI companion?
Our AI companion is specifically built for the needs of students. Based on the millions of content pieces we have on the platform we can provide truly meaningful and relevant answers to students. But its not only about answers, the companion is even more about guiding students through their daily learning challenges, with personalised study plans, quizzes or content pieces in the chat and 100% personalisation based on the students skills and developments.
Where can I download the Knowunity app?
You can download the app in the Google Play Store and in the Apple App Store.
Is Knowunity really free of charge?
That's right! Enjoy free access to study content, connect with fellow students, and get instant help – all at your fingertips.
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The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
I think it’s very much worth it and you’ll end up using it a lot once you get the hang of it and even after looking at others notes you can still ask your Artificial intelligence buddy the question and ask to simplify it if you still don’t get it!!! In the end I think it’s worth it 😊👍 ⚠️Also DID I MENTION ITS FREEE YOU DON’T HAVE TO PAY FOR ANYTHING AND STILL GET YOUR GRADES IN PERFECTLY❗️❗️⚠️
Thomas R
iOS user
Knowunity is the BEST app I’ve used in a minute. This is not an ai review or anything this is genuinely coming from a 7th grade student (I know 2011 im young) but dude this app is a 10/10 i have maintained a 3.8 gpa and have plenty of time for gaming. I love it and my mom is just happy I got good grades
Brad T
Android user
Not only did it help me find the answer but it also showed me alternative ways to solve it. I was horrible in math and science but now I have an a in both subjects. Thanks for the help🤍🤍
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
I found this app a couple years ago and it has only gotten better since then. I really love it because it can help with written questions and photo questions. Also, it can find study guides that other people have made as well as flashcard sets and practice tests. The free version is also amazing for students who might not be able to afford it. Would 100% recommend
Aubrey
iOS user
Best app if you're in Highschool or Junior high. I have been using this app for 2 school years and it's the best, it's good if you don't have anyone to help you with school work.😋🩷🎀
Marco B
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This app is phenomenal down to the correct info and the various topics you can study! I greatly recommend it for people who struggle with procrastination and those who need homework help. It has been perfectly accurate for world 1 history as far as I’ve seen! Geometry too!
Paul T
iOS user
The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
I think it’s very much worth it and you’ll end up using it a lot once you get the hang of it and even after looking at others notes you can still ask your Artificial intelligence buddy the question and ask to simplify it if you still don’t get it!!! In the end I think it’s worth it 😊👍 ⚠️Also DID I MENTION ITS FREEE YOU DON’T HAVE TO PAY FOR ANYTHING AND STILL GET YOUR GRADES IN PERFECTLY❗️❗️⚠️
Thomas R
iOS user
Knowunity is the BEST app I’ve used in a minute. This is not an ai review or anything this is genuinely coming from a 7th grade student (I know 2011 im young) but dude this app is a 10/10 i have maintained a 3.8 gpa and have plenty of time for gaming. I love it and my mom is just happy I got good grades
Brad T
Android user
Not only did it help me find the answer but it also showed me alternative ways to solve it. I was horrible in math and science but now I have an a in both subjects. Thanks for the help🤍🤍
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
I found this app a couple years ago and it has only gotten better since then. I really love it because it can help with written questions and photo questions. Also, it can find study guides that other people have made as well as flashcard sets and practice tests. The free version is also amazing for students who might not be able to afford it. Would 100% recommend
Aubrey
iOS user
Best app if you're in Highschool or Junior high. I have been using this app for 2 school years and it's the best, it's good if you don't have anyone to help you with school work.😋🩷🎀
Marco B
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This app is phenomenal down to the correct info and the various topics you can study! I greatly recommend it for people who struggle with procrastination and those who need homework help. It has been perfectly accurate for world 1 history as far as I’ve seen! Geometry too!
Paul T
iOS user
Understanding Adjusting Entries and Worksheet Steps in Accounting
Knowunity Philippines
@knowunityphilippines
Ever wondered how businesses make sure their financial records are spot-on at the end of each period? The accounting cycle's adjusting entries and worksheets are like giving your accounts a final check-up before presenting them to the world. These tools... Show more
Understanding Adjusting Entries in the Accounting Cycle
Think of adjusting entries as the final tune-up your car needs before a big trip - they're essential for making sure everything runs smoothly. These special journal entries happen at the end of each accounting period to update your account balances before creating financial statements.
Adjusting entries ensure that revenues and expenses land in the correct time period, following the matching principle and accrual basis of accounting. Without them, your financial statements would be like a half-finished puzzle - technically complete but missing crucial pieces.
Here's why they're absolutely necessary: during busy periods, some transactions affect multiple months or simply haven't been recorded yet. Picture Jollibee paying three months of rent upfront, or utility bills arriving after the accounting period ends - these situations need adjusting entries to sort them out.
Key Point: Adjusting entries are your safety net, ensuring all revenues earned and expenses incurred during the period are recorded, regardless of when cash changes hands.
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Types and Categories of Adjusting Entries
Accrued revenues represent money you've earned but haven't received yet - like a law firm completing work in December but billing in January. You'd debit Accounts Receivable and credit the relevant revenue account to capture this earning.
Accrued expenses work the opposite way - these are costs you've incurred but haven't paid yet. If employees work the last week of December but get paid in January, you need to record that salary expense in December where it belongs.
Deferred revenues happen when customers pay you before you've done the work - think gym memberships paid annually. You start with a liability (Unearned Revenue) and gradually convert it to revenue as you provide the service.
Deferred expenses are payments you've made in advance, like prepaid insurance or rent. These create assets that get expensed over time. Depreciation adjustments spread the cost of equipment and buildings over their useful lives, matching their expense with the revenues they help generate.
Remember: Each type follows the same logic - match revenues and expenses to the periods when they actually occur, not when cash moves.
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Worksheet Preparation Fundamentals
An accounting worksheet is like your financial command center - a multi-column spreadsheet that organizes all your accounting data before you create final financial statements. While not legally required, it's an incredibly powerful tool for staying organized and catching errors.
The worksheet contains several paired debit and credit columns: Trial Balance (starting balances), Adjustments (your adjusting entries), Adjusted Trial Balance (updated balances), Income Statement columns (revenues and expenses), and Balance Sheet columns (assets, liabilities, and equity).
Think of worksheets as your financial safety net. They help you organize information systematically, spot errors before they become problems, and provide a clear trail showing how adjustments affect your balances. For Filipino businesses, especially smaller ones, worksheets provide structure during hectic period-end procedures.
Pro Tip: Worksheets serve as your preliminary step before formal financial statements - they let you verify that debits equal credits at every stage and ensure you haven't missed any crucial adjustments.
Sign up to see the contentIt's free!
Access to all documents
Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
Step-by-Step Worksheet Preparation Process
Step 1: Enter the unadjusted trial balance - Start by listing all your general ledger accounts with their current balances. Debit balances go in the debit column, credit balances in the credit column. This is your foundation, so double-check that total debits equal total credits.
Step 2: Identify and enter adjusting entries - This is where your detective skills come in handy. Look through your business operations and account balances to spot what needs adjusting. Consider all five categories: accrued revenues, accrued expenses, deferred revenues, deferred expenses, and depreciation.
Enter each adjustment in the Adjustments columns, using letters (a, b, c) to keep them organized. Every adjustment must maintain the accounting equation balance - if you debit ₱10,000 somewhere, you must credit ₱10,000 somewhere else.
Success Strategy: Take your time with adjustments - rushing this step is like building a house on shaky foundations. Each adjustment you make here directly impacts your financial statements' accuracy.
Sign up to see the contentIt's free!
Access to all documents
Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
Sign up to see the contentIt's free!
Access to all documents
Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
Sign up to see the contentIt's free!
Access to all documents
Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
Sign up to see the contentIt's free!
Access to all documents
Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
Sign up to see the contentIt's free!
Access to all documents
Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
Sign up to see the contentIt's free!
Access to all documents
Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
We thought you’d never ask...
What is the Knowunity AI companion?
Our AI companion is specifically built for the needs of students. Based on the millions of content pieces we have on the platform we can provide truly meaningful and relevant answers to students. But its not only about answers, the companion is even more about guiding students through their daily learning challenges, with personalised study plans, quizzes or content pieces in the chat and 100% personalisation based on the students skills and developments.
Where can I download the Knowunity app?
You can download the app in the Google Play Store and in the Apple App Store.
Is Knowunity really free of charge?
That's right! Enjoy free access to study content, connect with fellow students, and get instant help – all at your fingertips.
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Students love us — and so will you.
4.9/5
App Store
4.8/5
Google Play
The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
I think it’s very much worth it and you’ll end up using it a lot once you get the hang of it and even after looking at others notes you can still ask your Artificial intelligence buddy the question and ask to simplify it if you still don’t get it!!! In the end I think it’s worth it 😊👍 ⚠️Also DID I MENTION ITS FREEE YOU DON’T HAVE TO PAY FOR ANYTHING AND STILL GET YOUR GRADES IN PERFECTLY❗️❗️⚠️
Thomas R
iOS user
Knowunity is the BEST app I’ve used in a minute. This is not an ai review or anything this is genuinely coming from a 7th grade student (I know 2011 im young) but dude this app is a 10/10 i have maintained a 3.8 gpa and have plenty of time for gaming. I love it and my mom is just happy I got good grades
Brad T
Android user
Not only did it help me find the answer but it also showed me alternative ways to solve it. I was horrible in math and science but now I have an a in both subjects. Thanks for the help🤍🤍
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
I found this app a couple years ago and it has only gotten better since then. I really love it because it can help with written questions and photo questions. Also, it can find study guides that other people have made as well as flashcard sets and practice tests. The free version is also amazing for students who might not be able to afford it. Would 100% recommend
Aubrey
iOS user
Best app if you're in Highschool or Junior high. I have been using this app for 2 school years and it's the best, it's good if you don't have anyone to help you with school work.😋🩷🎀
Marco B
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This app is phenomenal down to the correct info and the various topics you can study! I greatly recommend it for people who struggle with procrastination and those who need homework help. It has been perfectly accurate for world 1 history as far as I’ve seen! Geometry too!
Paul T
iOS user
The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
I think it’s very much worth it and you’ll end up using it a lot once you get the hang of it and even after looking at others notes you can still ask your Artificial intelligence buddy the question and ask to simplify it if you still don’t get it!!! In the end I think it’s worth it 😊👍 ⚠️Also DID I MENTION ITS FREEE YOU DON’T HAVE TO PAY FOR ANYTHING AND STILL GET YOUR GRADES IN PERFECTLY❗️❗️⚠️
Thomas R
iOS user
Knowunity is the BEST app I’ve used in a minute. This is not an ai review or anything this is genuinely coming from a 7th grade student (I know 2011 im young) but dude this app is a 10/10 i have maintained a 3.8 gpa and have plenty of time for gaming. I love it and my mom is just happy I got good grades
Brad T
Android user
Not only did it help me find the answer but it also showed me alternative ways to solve it. I was horrible in math and science but now I have an a in both subjects. Thanks for the help🤍🤍
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
I found this app a couple years ago and it has only gotten better since then. I really love it because it can help with written questions and photo questions. Also, it can find study guides that other people have made as well as flashcard sets and practice tests. The free version is also amazing for students who might not be able to afford it. Would 100% recommend
Aubrey
iOS user
Best app if you're in Highschool or Junior high. I have been using this app for 2 school years and it's the best, it's good if you don't have anyone to help you with school work.😋🩷🎀
Marco B
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This app is phenomenal down to the correct info and the various topics you can study! I greatly recommend it for people who struggle with procrastination and those who need homework help. It has been perfectly accurate for world 1 history as far as I’ve seen! Geometry too!
Paul T
iOS user