Question

What Are the 4 Types of Adjusting Entries?

Answer 1

The 4 types of adjusting entries in accounting are as follows:

1. Accrued expenses: It is recognising the expenses before payment in cash.
2. Accrued revenues: It refers to the situation where revenue is earned but not recorded in the current accounting period as invoice has not been raised and no cash payment is received.
3. Deferred expenses: Amount that is paid in advance for using assets that provide benefits over more than one accounting period.
4. Deferred revenues: It refers to the situation in which cash is received before the revenue is earned.

Also read:

• MCQs on Journal Entries
• Accrued Expenses Definition and Examples

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