- Such unrecorded expenses are recorded by an adjusting entry.
- We need to adjust entries when we apportion the costs of prepaid expenses.
- Thus, an adjusting entry is needed to increase the Allowance for Doubtful Accounts from its present level to $5.
- The recording of depreciation expense is an adjusting entry which apportions a recorded cost.
- Because the salaries from December 3 to 31 have accrued at the yearend, the following adjusting entry would be made to accrue salaries expense incurred on December 31.