Which of the following is NOT an example of an adjusting entry?
A) recording unpaid interest at year end relating to an outstanding loan balance at year end
B) recording depreciation on office equipment purchased during the year
C) recording the gain on the sale of equipment made during the year
D) reducing the prepaid rent account for the portion of rent actually used

Question

Quizplus · Accepted Answer

Recording the gain on the sale of equipment made during the year is not an example of an adjusting entry as it would be recorded as a regular transaction and is not related to any previous period's item. Adjusting entries are made at the end of an accounting period to record any transactions or events that were not recorded during the period or to correct any errors in the initial recording of transactions. A, B, and D are examples of adjusting entries.

Which of the Following Is NOT an Example of an Adjusting