Adjusted Transactions

What are Adjusted Transaction

Adjusted transactions are those transaction which are passed to adjust the trial balance and prepare the final trial balance. There are number of transaction which are not entered in the books of account during the year for various technical entries.

When Adjusted Transactions entered

Adjusted transaction are entered in the books of accounts at the year end and it is an important process before finalizing the trial balance and preparation of financial statements.These adjusted transaction  are entered in the books of account and adjusted trial balance is extracted. The adjusted trial balance is final summary for the preparation of financial statement.

Types of Adjusted Transactions

The adjusted transaction can be classified on the following categories.

1. Adjusted Transaction for different provisions
2. Adjusted Transactions for accrual i.e unaccounted for expenses
3. Adjusted Transaction for prepayments of expenses
4. Adjusted Transaction for Depreciation
5. Adjusted Transaction for closing inventory 

Examples of Adjusted Transactions

The provision for different expenses specially doubtful debt is created at the year end. 

Date	Particulars	Debit	Credit
	Income Statment A/c	200
	Provision for doubtful Debt A/c		200

The different expense which are payable in next period but relate to this year are accounted for by adjusted transaction under the accrual concept of accounting. The salary is and utilities bill are the most common example of accrual expenditure.

Date	Particulars	Debit	Credit
	Salary A/c	200
	Salary Payable A/c		200

The prepayment for next year is also adjusted normally at the time of payment the whole amount is charged to the expense. At the year end an adjustment entry is passed to reverse the expense and current asset is created.

Date	Particulars	Debit	Credit
	Prepaid Rent A/c	200
	Rent A/c		200

The depreciation is normally deducted from the fixed asset at the year end.

Date	Particulars	Debit	Credit
	Depreciation	200
	Fixed Assets A/c		200