Adjusting Journal Entries Explained for Beginners!

The 5 Essential Adjusting Entries You MUST Know | Accrual Accounting Basics In this video, we’re walking through the 5 most essential adjusting journal entries (AJEs) you need to understand for accurate, accrual-based accounting. Adjusting entries are recorded at the end of the accounting period—Step 6 of the Accounting Cycle—to make sure revenue and expenses are reported in the correct period, not just when cash moves. These entries are required under GAAP and IFRS. 📌 What You’ll Learn: What adjusting entries are and why they matter The difference between expense-related and revenue-related entries How to record: Accrued Expenses Accrued Interest Prepaid Expenses Accrued Revenues Deferred (Unearned) Revenues 📚 Related Videos: ▶️ What is the Accounting Cycle? → https://youtu.be/wnJ10GR1fC8?si=QT19ZcQhbudwurOn 👍 Like this video if it helped, and subscribe for Part 2, where we’ll cover depreciation, bad debts, supplies, and inventory adjustments! TIMESTAMPS 00:00 Intro – What are Adjusting Entries? 00:20 GAAP/IFRS and the Accrual Basis 00:40 Purpose of Adjusting Entries 01:01 Accounts Involved (Income Statement + Balance Sheet) 01:20 Where in the Accounting Cycle? 01:40 Accruals vs. Prepaids/Deferrals 02:08 Expense-Related Adjusting Entries Intro 02:21 Accrued Expenses 03:31 Example – Unpaid March Wages 04:02 Journal Entry for Accrued Expenses 04:19 Accrued Interest 04:45 Example – March Loan Interest 05:10 Journal Entry for Accrued Interest 05:20 Prepaid Expenses 06:07 Example – Insurance Policy 06:25 Journal Entry for Prepaids 06:48 Recap: Expense Entries 06:57 Revenue-Related Adjusting Entries Intro 07:08 Accrued Revenues 07:39 Example – March Consulting Project 07:55 Journal Entry for Accrued Revenue 08:11 Deferred (Unearned) Revenue 09:12 Example – $1,500 Advance Payment 09:33 Journal Entry for Deferred Revenue 09:56 Wrap-Up & Summary 10:17 What’s in Part 2? (Depreciation, Bad Debts, Inventory) 10:29 Like, Subscribe & Outro #AccountingBasics #AdjustingEntries #AccrualAccounting #GAAP #ConciergeCPA