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Adjusting Entries and Others

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23 views1 page

Adjusting Entries and Others

Uploaded by

denver solis
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Adjusted Basis

After a taxpayer's basis in property is determined, it must be adjusted upward to include any additions of capital to the
property and reduced by any returns of capital to the taxpayer. Additions might include improvements to the property
and subtractions may include depreciation or depletion. A taxpayer's adjusted basis in property is deducted from the
amount realized to find the gain or loss on sale or disposition.
 
Adjusted Gross Income
Gross income reduced by business and other specified expenses of individual taxpayers. The amount of adjusted
gross income affects the extent to which medical expenses, non business casualty and theft losses and charitable
contributions may be deductible. It is also an important figure in the basis of many other individual planning issues as
well as a key line item on the IRS form 1040 and required state forms.
 
Adjusted Trial Balance
A trial balance prepared after all adjusting entries have been recorded and posted to the accounts. Should have
equal credit and debit totals.
 
Adjusting Journal Entry
An accounting entry made into a subsidiary ledger called the General journal to account for a periods changes,
omissions or other financial data required to be reported "in the books" but not usually posted to the journals used for
typical period transactions (the cash receipts journal, cash disbursements journal, the payroll journal, sales journal and
so on) the entry is posted to the general ledger accounts directly and usually will be numbered itself, dated and have
an explanation. Example: AJE# 1 12-31-2003, debit Cash in bank $1,000. Credit interest income $1,000, to record
interest income on business bank account at year end, not recorded in cash receipts journal but credited by the bank.
(Cross-reference bank reconciliation and account where it was found)
 
ADR
Receipts for shares of foreign company stock maintained by an intermediary indicating ownership.
 
Adverse Opinion
Expression of an opinion in an AUDITORS' REPORT which states that FINANCIAL STATEMENTS do not fairly
present the financial position, results of operations and cash flows in conformity with GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES (GAAP).
 
Affiliated Company
Company, or other organization related through common ownership, common control of management or owners, or
through some other control mechanism, such as a long-term LEASE.
 
Agency Fund
Fund consisting of ASSETS where the holder agrees to remit the assets, income from the assets, or both, to a
specified beneficiary in due course or at a specified time.
 
AICPA
National professional membership organization that represents practicing CERTIFIED PUBLIC ACCOUNTANTS
(CPAs). The AICPA establishes ethical and auditing standards as well as standards for other services performed by its
members. Through committees, it develops guidance for specialized industries. It participates with the FINANCIAL
ACCOUNTING STANDARDS BOARD (FASB) and the GOVERNMENT ACCOUNTING STANDARDS BOARD (GASB)
in establishing accounting principles.

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