{"id":32179,"date":"2017-06-13T09:00:52","date_gmt":"2017-06-13T01:00:52","guid":{"rendered":"https:\/\/zahiraccounting.com\/en-my\/?p=32179"},"modified":"2017-06-13T10:18:19","modified_gmt":"2017-06-13T02:18:19","slug":"correction-journal-adjustment-journal-entries","status":"publish","type":"post","link":"https:\/\/zahiraccounting.com\/en-my\/32179-correction-journal-adjustment-journal-entries.html","title":{"rendered":"Correction Journal and Adjustment Journal Entries"},"content":{"rendered":"

\"Correction<\/a><\/p>\n

Journal is commonly applied in preparing the financial statement. However some people are still ge confused in term of adjustment and correction. In accounting field, these terms are significantly different during the financial statement preparation.<\/p>\n

There are some simple point that may influence someone’s understanding on adjustment and correction. Generally, it is applied as the base of accounting knowledge. These points are:<\/p>\n

    \n
  1. Does someone fully understand the debit-credit (double-entry)?<\/li>\n
  2. Does someone have fully understand the journal techniques?<\/li>\n<\/ol>\n

    Very simple point but provide great contribution in preparing financial statement.<\/p>\n

    Correction Journal<\/p>\n

    The function of correction journal is to correct the wrong made journal – either mistakes in numbers or accounts. Mistakes occurred during the journal recording, especially by using papers are very common. Let\u2019s see the following example:<\/p>\n

    On November 12, 2013 Ari receives a cash rent payment receipt. Then Ari made a journal[Debit] Rental Expense IDR. 10.130.000, -[Credit] Cash IDR. 10.130.000, –<\/p>\n

    On the next day, the manager informed Ari that the balance should be Rp 10,310,000, – after comparing between the receipt with journal that have been made, it turned out there are numbers error. To correct it, Ari entered correction journal :[Debit] Rental Expense IDR. 180.000, -[Credit] Cash IDR. 180.000, –<\/p>\n

    After correction journal is entered then total rental expense is recognized correct, which is IDR. 10.130.000, – + IDR. 180.000, – = IDR. 10.310.000, – the same as the number shown on rent payment receipt.<\/p>\n

    Adjustment journal entry. Adjustment entries are journals which are created to adjust the certain account balance values to meet the actual conditions. The adjusted accounts usually arise due to accrual cost and deferrals fees. There are 2 methods in preparing adjustment journal :1.Asset Method \u00a0(used up)2.Charges Method (have not been used)<\/p>\n

    The example:PT Makmur Sejahtera shows the equipment account in the Trial Balance of IDR. 3,250,000, – and the amount in the warehouse IDR 1,400,000, – \u00a0the difference is IDR 1,850,000, – as the equipment cost, with the adjusting entries:[Debit] Equipment costs IDR. 1.850.000, -[Credit] equipment IDR. 1.850.000, –<\/p>\n

    The above example can be explained as follow:Supplies\/ equipment are material purchased by the company and use for internal consumption. Generally, the equipment is recorded during the purchase, but not recording when it is consumed\/used. As the result, the balance value on the trial balance is the same as the purchase price for a period. \u00a0Since equipment is used\/consumed everyday, the quantity amount by the end of the period should be smaller. The difference between the amount of equipment in a balance sheet and the actual one should be entered as a cost of equipment. The difference record is made through bookkeeping adjustment (adjusting entries).<\/p>\n

    Correction journal is recommended to correct the journal in current period. \u00a0What about if it is out of the accounting period?. It is not recommended because it will influence the settled financial statements. Adjusting entries are journals that are created to adjust the balance values for certain accounts to meet the actual conditions. Accounts to be customized are usually accounts that relate to accrual costs and deferral fees. For examples : prepaid expenses, advance payment, accumulated depreciation, accrued expenses etc.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Journal is commonly applied in preparing the financial statement. However some people are still ge confused in term of adjustment […]<\/p>\n","protected":false},"author":11,"featured_media":32188,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"yoast_head":"\nCorrection Journal and Adjustment Journal Entries - Best Accounting Software in Malaysia | Zahir<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/zahiraccounting.com\/en-my\/32179-correction-journal-adjustment-journal-entries.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Correction Journal and Adjustment Journal Entries - Best Accounting Software in Malaysia | Zahir\" \/>\n<meta property=\"og:description\" content=\"Journal is commonly applied in preparing the financial statement. 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