Question

How do you figure out the adjustments data T-account if they do not post an amount in the description of the data?

Answer 1

Adjusting entries are those entries that convert a company’s accounting records to accrual basis of accounting.

Adjustments data can be figured out even if the amount is not posted in the description of the data. This is because the correct balance in the T-account = preliminary balance +/- adjusting balance.

For example if the preliminary balance of supplies account (an asset) is 1100 and the correct balance is 725 then the adjusting entry will be = 1100-725 = 375. This amount of 375 will be on the credit side as the preliminary balance is being reduced.