Adjusting entries are needed to ensure the revenues and expenses are recorded in the correct period. Four different types of adjusting entries are required for accrual basis accounting:
- Deferred revenue.
- Deferred expenses.
- Accrued revenue.
- Accrued expenses.
Choose one of these types of adjusting entries, and then discuss the accounts that would be impacted by that entry and how that adjustment will impact the financial statements.
