Adjusting entries
Create balanced debit/credit entries, accept them and watch the financial statements update automatically.
Adjusting entries are the year-end adjustments: income tax expense, amortization, accruals, reclassifications. An accepted entry is merged into the trial balance and flows immediately into the balance sheet, income statement and deficit.
- 1Open Adjustments in the sidebar.
- 2Click New entry and give it a clear description.
- 3Add the debit and credit lines: the entry must balance (total debits = total credits).
- 4Click Accept to apply it to the financial statements.
Example: the year-end income tax accrual
A typical entry: the income tax expense ($20,500 debit) offset by two payable liability accounts ($9,000 + $11,500 credit). Debits equal credits: the entry balances, can be accepted, and then flows into the balance sheet and income statement. A refused or pending entry never affects the statements.
You can edit or remove an accepted entry at any time: the statements recalculate right away.