[xmas]

I am looking for examples for AJE’s specific to situations arising due to cut off in Sales, inventories and purchases. Can anyone point me to a book or a webpage?

Thanks in advance.

[M.O.D.]

These are not usually considered adjusting entries, but correction of errors.

Furthermore, the FAR question is likely to be what is the correct inventory, sales, COGS, not how do you correct the error made yesterday. You just undo that entry and make a correct entry. The difference is the correcting entry if you will..

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[mla1169]

Not necessarily a correction of errors. Usually it's a timing difference. Here's an example-company orders inventory on Dec 28. It arrives on Jan 3 and the invoice doesn't get to A/P until Jan 5. The terms are FOB shipping point which means it became the purchasers inventory on the day it shipped (Dec 28). Need an AJE to put the inventory and payable on the books at dec 28.

Debit inventory

Credit accounts receivable

For sales the opposite holds true. Most accounting packages will recognize revenue at the point of shipment. Say you have a customer that insists on terms of FOB destination. You shipped on Dec 28 then check the tracking to find out it arrived on Jan 3. Now you have to hold back that sale at year end.

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[Author]

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