Milestone 2 - Trial Balance & Adjusted Entries (Video Transcript) PDF

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ACC201 Milestone 2: Trial Balance, Adjusting Entries, & Adjusted Trial Balance (Video Transcript) https://www.youtube.com/watch?v=eZKeuc_JGc&list=PLlUGQlFH9gA9Q313fqSAIwdJ3lBYQypGH&index=10

Hey! After you've completed milestone one and gotten my feedback, you need to incorporate my feedback. Make sure that you correct everything that I've identified and look through it again. Use those check figures that I've offered in the announcement to make sure that your amounts are correct. Once that's done, ask any questions if you can't figure something out. Send it to me via email. I'm happy to respond within a day.

Now, it's time to move on to our next steps, which is to create the trial balance. What you need to do is take every balance from the t-accounts and move it to its proper place in the trial balance sheet. It's highlighted here. Make sure that the accounts that have a debit balance have a number and debit balance column here and an adjusted trial balance. The ones that have a credit balance, move it over here to the credit side. All assets, expenses, and dividends will have a debit balance. The others will have a credit balance. Look at the last page of the slide show on the video, “Accounting Equation and Debits and Credits” to see which ones should have a normal balance of debit and credit. Look for the up arrows that's the normal balance.

So, once you've moved all your account balances here, then it's time to move on to the adjusting entries. You've been given some scenarios of certain accounts that need to be adjusted, and you'll make your adjusting entries here. As I noted in feedback, remember accrual entries are always debit expense credit payable. So, you pick which kind of expense accountant and which kind of payable accounts from the chart of accounts and select those here. You must do some math in a lot of adjusting entries. They're easy to do. Generally, the way you can do it is using what I call BASE—beginning balance, add, subtract and ending balance. Well, you'll see, the beginning balance is whatever you have on your adjusted trial balance. Any additions or subtractions will come from your scenario here, and ending balances are generally provided. So, use “B, A, S, E.” For our insurance situation, remember we bought the insurance at the end of July, so it's only going to cover August and September. So, we'll only have two months. For the interest on our notes, that was at the beginning of July, so we owe interest on July, August, and September. So, that'll be three months. Really easy way to compute interest, you take the number of

months divided by twelve (so in this case it's three divided by 12), multiply it by the interest rate, and multiply that by the principal amount. That will give you the exact amount of interest that you have to accrue for that period. Let me know if you have any questions on these adjusting entries.

Once you're done with the adjusting entries sheet then you just move those over to the adjusting entries column. Move the debits over to the debit column with the right account, and you move the credits over to the credit column. Your adjusted trial balance should be linked, and all the computations made, so it will automatically populate. To do the math, use the check figures that I've provided at the bottom of the announcement to see that you're adjusting entries, debits and credits, match what I've provided. Also, the adjusted trial balance, debits and credits, match what I've provided. Be sure to ask me any questions. I'm happy to review your work. Just send me an email. Thanks!...