Adjusting Journal Entries Format
Adjusting journal entries are made in the General Journal to record period-end adjustments before the financial statements are prepared. They are used to record depreciation, bad debts, provision for doubtful debts, and accrued or prepaid expenses and income so that the accounts follow the accrual basis. Each entry shows the account debited, the account credited, and a short narration.
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Blank format
| Date | Particulars | Folio | Debit (RM) | Credit (RM) |
|---|---|---|---|---|
| xx | Account debited | xx | XX | |
| Account credited | xx | XX | ||
| (Short narration of the adjustment) | ||||
| xx | Account debited | xx | XX | |
| Account credited | xx | XX | ||
| (Short narration of the adjustment) |
Write the account debited at the left edge of the Particulars column, then the account credited on the next line, indented, with a short narration in brackets below it. For every entry the total in the Debit column must equal the total in the Credit column.
Parts of the format
- Date column
- Records the balance date, usually the last day of the accounting period (e.g. 31 December).
- Particulars column
- The account debited is written first at the left, the account credited below it and indented, followed by the narration in brackets.
- Folio column
- Shows the ledger reference where the entry is posted; left blank until posting is done.
- Debit column
- Records the amount for the account debited, in ringgit only, without the RM symbol.
- Credit column
- Records the amount for the account credited; its total must equal the total of the Debit column.
- Narration
- A short explanation in brackets stating the reason for each adjustment entry.
Filled example
Perniagaan Perabot Sri Melati, owned by Encik Faizal, closes its accounts on 31 December 2024. On that date: depreciation on fittings is RM4,000; a bad debt of RM600 is written off; a provision for doubtful debts of RM1,500 is created; insurance prepaid is RM800; and rent accrued is RM1,200 for December.
| Date | Particulars | Folio | Debit (RM) | Credit (RM) |
|---|---|---|---|---|
| 2024 Dec 31 | Depreciation of fittings | 4,000 | ||
| Accumulated depreciation of fittings | 4,000 | |||
| (Depreciation of fittings for 2024) | ||||
| Bad debts | 600 | |||
| Debtors account | 600 | |||
| (Bad debt written off) | ||||
| Profit and loss | 1,500 | |||
| Provision for doubtful debts | 1,500 | |||
| (Creating the provision for doubtful debts) | ||||
| Prepaid insurance | 800 | |||
| Insurance | 800 | |||
| (Insurance prepaid at 31 Dec 2024) | ||||
| Rent | 1,200 | |||
| Accrued rent | 1,200 | |||
| (Rent accrued for December 2024) | ||||
| Total | 8,100 | 8,100 |
Common layout errors
Related chapters and procedures
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