Every common month-end adjustment, its entry pattern, and how to calculate the amount.
Prepaid expense used: Dr Expense / Cr Prepaid — amount = cost × months used ÷ months covered.
Accrued expense: Dr Expense / Cr Payable — amount = what was used but not billed or paid.
Unearned revenue earned: Dr Unearned Revenue / Cr Revenue — amount = portion delivered.
Accrued revenue: Dr Receivable / Cr Revenue — amount = work done but not billed.
Depreciation: Dr Depreciation Expense / Cr Accumulated Depreciation — (cost − salvage) ÷ life.
If an adjustment touches Cash, re-check it.
On January 1, Greenway Landscaping paid $1,200.00 for 6 months of insurance and debited Prepaid Insurance. Record the adjustment at Mar 31, 2026 if no insurance expense has yet been recorded and 2 months of coverage need to be expensed now.
| Insurance Expense | $400.00 | |
| Prepaid Insurance | $400.00 |
The used portion moves from the prepaid asset to expense.
The Supplies account shows $1,060.00 at Mar 31, 2026. A physical count finds $370.00 of supplies still on hand. Record the adjustment.
| Supplies Expense | $690.00 | |
| Supplies | $690.00 |
The account is reduced to the amount actually on hand and the used portion is expensed.
Corner Bean Café pays wages of $220.00 per working day every Friday. March 31 falls on a Tuesday, so 3 working days have been earned but not paid. Record the adjustment.
| Wages Expense | $660.00 | |
| Wages Payable | $660.00 |
Wages earned in March are a March expense even though they are paid in April.
Maple Street Tutoring received $1,600.00 in advance for a tutoring package and credited Unearned Revenue. By Mar 31, 2026, 25% of the sessions have been delivered. Record the adjustment.
| Unearned Revenue | $400.00 | |
| Service Revenue | $400.00 |
Delivering the service reduces the liability and recognizes revenue.
Item 1 of 3
On January 1, Greenway Landscaping paid $1,800.00 for 12 months of insurance and debited Prepaid Insurance. Record the adjustment at Mar 31, 2026 if no insurance expense has yet been recorded and only March coverage needs to be expensed now.
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Original content. Figures are fictional; examples are generated and checked by our accounting engine. Updated 2026-10-29.