The "Why" and "When"
This is the specific time during the accounting cycle when adjusting entries are performed.
End of fiscal period
Name one of the three specific accounts listed in the sources that are "usually already accurate" and do not need adjustment.
What is Cash, Accounts Receivable, or Accounts Payable
This is the physical action a business must take at the end of a period before recording an inventory adjustment.
What is performing a physical count?
If Book Inventory is $10,000 and the Physical Count is $8,200, this is the dollar amount of the adjustment.
What is $1,800
Which color appears on more national flags than any other color?
Red
Adjusting entries are necessary to make financial statements accurate, update accounts to reflect reality, and satisfy this accounting goal.
What is matching revenues and expenses to the correct period?
This asset account must be adjusted because items may be lost, stolen, or sold without being immediately logged in the records.
What is Merchandise Inventory?
This is the second step of the adjustment process, involving a check between the physical count and the accounting records.
What is comparing the count to the book balance
This is the account you debit when the physical count of inventory is lower than the book balance.
What is Cost of Merchandise Sold?
Which well-known comic book series features four characters named after Italian Renaissance artists?
Ninja Turtles
This is the "Key Rule" for determining if any specific account balance requires an adjustment.
What is "if the balance in an account does NOT reflect reality, it must be adjusted"?
These two "Accrued" accounts were specifically identified as requiring year-end adjustments.
What are Accrued Revenue and Accrued Expenses?
List two of the three reasons provided in the sources for why inventory records might not equal the physical count.
What are: it is used/sold, it is lost/damaged/stolen, or the records simply do not equal the count?
When Cost of Merchandise Sold increases due to an adjustment, this is the resulting effect on the company's Net Income.
What is a decrease in Net Income?
In a game of poker, what does a "flush" consist of?
Five cards of same suit
Adjustments are often needed because some expenses are used up gradually, or because some account balances are based on these.
What are estimates?
Besides Inventory and Accruals, name two other accounts from the sources that require adjustment.
What are Supplies, Prepaid Insurance, or Depreciation
If the Book Inventory is $3,300 and the physical count is $3,300, this is the required journal entry.
What is "no entry is required"
If your physical count is $400 higher than your book balance, you would credit this specific account.
What is Cost of Merchandise Sold?
What are the colors of the Olympic Rings?
Blue, yellow, black, green, and red
This is the primary reason why a business cannot simply use the unadjusted "Book Balance" for its final reports.
What is because values change over time and may not reflect reality?
This specific account is categorized as an expense and is used to offset inventory adjustments.
What is Cost of Merchandise Sold (or COGS)?
In accounting terms, recording the difference between the books and the physical count is known as this.
What is recording the adjustment?
An adjustment where the book value of $15,800 is increased to an actual value of $16,100 results in this specific impact on Net Income.
What is an increase of $300?
What is the only continent without an active volcano?
Ausralia