Boomer company purchased office equipment for $1,000 on december 5. the office equipment depreciated $30 during december. the adjusting entry should include a: Debit to Depreciation expense $ 30
Adjusting entries correct previously recorded journal entries, allowing revenue and costs to be recognized as they occur.
Assume, for example, Depreciation that you bill a customer for $1,000 in services in December. They then pay you in January or February, after the previous fiscal year has ended.
To begin, you record the cash in December as profit expected to be collected in the future in accounts receivable. Then, when the client pays in February, an adjustment entry must be made to record the receivable as cash.
This is referred to as an accrued revenue adjustment entry.
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