Correcting Entries vs. Adjusting Entries: Which One Fixes an Error, Which One Closes the Period
Adjusting entries record what timing left out; correcting entries fix prior errors. Reverse only accruals — reversing a correction resurrects the error.
#adjusting-entries
Adjusting Entries
Create adjusting entries for accurate period-end reporting
Accruals vs. Deferrals Explained: How Accrued Expenses, Accrued Revenue, Prepaid Expenses, and Unearned Revenue Each Hit Your Books
Accruals book revenue and expenses before cash moves; deferrals hold cash on the balance sheet until earned or used.
What Is a Post-Closing Trial Balance? How Closing Entries Zero Out Temporary Accounts and Leave Only Permanent Balances for the New Period
After closing entries, only assets, liabilities, and equity carry balances forward — the post-closing trial balance proves the close worked.
Accrued Revenue vs. Deferred Revenue: The Two Timing Gaps Every Accrual-Basis Business Must Book
Accrued revenue is earned-but-unbilled income (an asset); deferred revenue is unearned cash (a liability) — each clears with its own adjusting entry.
What Is a Trial Balance? How It Prepares Your Balance Sheet and Catches Bookkeeping Errors Before Month-End Close
Total debits must equal total credits before you close — the trial balance proves it, then feeds your balance sheet.
Prepaid Expenses Explained: Stop Letting Annual Insurance, Rent, and Software Bills Distort Your Monthly Profit
How small businesses should book prepaid insurance, rent, software, and retainers — the initial entry, monthly amortization schedule, IRS 12-month rule, and a written de minimis policy that keeps monthly profit comparable and unlocks year-end tax deductions.
Accrued Payroll: The Month-End Journal Entry for Wages Earned but Not Yet Paid
Accrued payroll records wages, taxes, and PTO employees earned before period-end but are paid after it. Learn how to calculate the accrual, post the month-end journal entry, and reverse it next month to avoid double-counting.
Allowance for Doubtful Accounts: Keep Accounts Receivable Honest
The allowance for doubtful accounts estimates uncollectible receivables. Learn the aging and percentage-of-sales methods, plus how write-offs keep accounts
From Three Weeks to Five Days: A Faster Month-End Close With Cut-Off Discipline and Smarter Reconciliations
A day-by-day close calendar that compresses a typical three-week month-end into five business days. Pre-stage recurring entries, reconcile cash on day one, tie sub-ledgers on day two, post accruals and prepaids on day three, run flux analysis on day four, and lock the period on day five.
How to Close the Books in Five Days: Checklists, Cut-Off Discipline, and Reconciliation Order
A three-week close compresses into five business days through three habits—a written close checklist sequenced by dependency, firm cut-off procedures with accruals for late items, and reconciliation done high-risk-first in a consistent order.
The Tax Professional's FAQ: Working with Bookkeepers Without the Friction
A practical FAQ for CPAs and tax preparers who inherit a client's books from a third-party bookkeeper—covering opening balance verification, year-end document checklists, 1099 ownership, cash-to-accrual conversions, and the handoff habits that prevent March surprises.
Adjusting Entries in Beancount: Your Month-End Tune-Up
Learn how to perform essential adjusting entries in Beancount for accurate financial reporting and a clearer view of your business's health at month-end.