"In reality, do all of my clients have the skill to understand
adjusting entries?--Absolutely," responded Eugene F.
* Sit for three two-hour exams at any of 300 Prometric (formerly Sylvan-Prometric) test centers nationwide on the following topics:
adjusting entries, error correction (including the bank reconciliation), payroll, depreciation (book and tax), inventory and, as of October 1, internal controls and fraud prevention.
For example, the phrases used to explain
adjusting entries are especially appealing and should be memorable for students.
As the cows are culled from the herd, the accountant makes the
adjusting entries to the oldest entry on the books.
Understaffing in the accounts department is a concern, together and large numbers of
adjusting entries or discrepancies and differences that go unreconciled.''
For example, we had people commenting, 'I perform an audit and I recommend
adjusting entries. Under this standard, I wouldn't be permitted to make an adjusting entry.' That's not what was intended here.
Based on the national Certified Bookkeeper examination, the test provides 10 questions on journal entries,
adjusting entries, the bank reconciliation, error correction, and other key skills.
A/R automatically interfaces with our G / L at month end leaving only
adjusting entries to keep A/R and G/L in balance.
At a minimum, though, the case does not stand for the proposition that a service taxpayer that keeps its books on the accrual basis is prohibited from using
adjusting entries to convert to the cash basis for tax purposes.
* Review
adjusting entries. Using an integrated accounting system should eliminate the need for almost all standard adjusting journal entries.
This case-based approach enables students to "learn how to learn." Provided only with a partial set of client-prepared financial statements, the student teams research accounting issues; question the client's controller (played by the professor) in order to obtain additional information; develop necessary
adjusting entries; draft corrected financial statements and required note disclosures; and, finally, present the client's corrected financial statements at the annual stockholders' meeting.
* Prepare all documentation and
adjusting entries at the time of the loan.
If they did not record the
adjusting entries as illustrated in Chapter 4, they would look to the unadjusted trial balance for the income statement and equity accounts that should be closed.
Estimates are involved with many
adjusting entries.
