Introduction to Adjusting Entries (Jurnal Penyesuaian)
📌 Adjusting entries are made to update account balances from the trial balance to reflect the actual economic reality at the end of the accounting period.
🎯 The goal is to ensure that asset, liability, equity, revenue, and expense accounts show their true ending balances.
⚙️ Adjustments are necessary for errors in recording, unrecorded transactions (like accrued expenses/revenues), asset depreciation, prepaid expenses, and unearned revenues.

Types of Transactions Requiring Adjustment
🤔 Recording Errors: Correcting mistakes in initial entries, exemplified by treating the Giraffe Analogy (where initial incorrect steps must be reversed before correcting the main entry).
⏳ Accruals/Deferrals: Accounting for expenses incurred but not yet paid (accrued expenses) or revenues earned but not yet received (accrued revenues).
📉 Asset Valuation Changes: Recording the decrease in value for current assets (like supplies used) or fixed assets (like depreciation of equipment).
💰 Prepayments: Adjusting prepaid expenses (like rent paid in advance) or unearned revenues (revenue received in advance) over the period they cover.

Practical Application: Constructing Adjusting Entries
📝 Accrued Expenses (Unpaid Expenses): Debit Expense account, Credit Liability account (e.g., Debit Salaries Expense, Credit Salaries Payable).
🌟 Unearned Revenue: If initially recorded as a liability, the adjustment is Debit Unearned Revenue, Credit Revenue account for the portion earned.
⚙️ Asset Usage (e.g., Supplies): Debit Expense account (e.g., Supplies Expense), Credit Asset account (e.g., Supplies) for the amount used.
👴 Depreciation: Debit Depreciation Expense, Credit Accumulated Depreciation for the asset (e.g., $10\%$ of Equipment value is \500,000 \rightarrow \text{Debit Depreciation Expense Equipment, Credit Accumulated Depreciation Equipment}$).

Case Study: Salon Dewi Cantika Adjusting Entries (July 2020)
📊 Supplies Adjustment: Initial supplies were \4,000,000$, remaining balance is $\$1,500,000$. The used amount is \4,000,000 - \1,500,000 = \2,500,000$.
* Entry: Debit Supplies Expense \2,500,000$, Credit Supplies $\$2,500,000$.
🛋️ Equipment Depreciation: $10\%$ depreciation on \5,000,000$ equipment equals $\$500,000$.
* Entry: Debit Depreciation Expense Equipment \500,000$, Credit Accumulated Depreciation Equipment $\$500,000$.
💳 Prepaid Rent Adjustment (Treated as Expense): Rent was paid for one year starting in June. Since the initial entry used the Expense method (Debit Rent Expense), the adjustment reverses the unused portion ($\frac{11}{12}$ of the total).
* Entry (Unused portion, \1,100,000$): Debit Prepaid Rent, Credit Rent Expense.
💡 Accrued Electricity Expense: Electricity used in July but unpaid amounts to \250,000$.
* Entry: Debit Electricity Expense \250,000$, Credit Accounts Payable $\$250,000$.

Key Points & Insights
➡️ The process of correcting recording errors can be simplified by netting the resulting entries (as shown in the giraffe analogy reversal).
➡️ Always check the original trial balance entry method (e.g., asset method vs. expense method for prepayments) to determine the correct account to credit or debit in the adjusting entry.
➡️ For depreciation, the credit entry always goes to Accumulated Depreciation, which acts as a contra-asset account, not directly reducing the fixed asset account.
➡️ The total debits must always equal the total credits ($\sum \text{Debit} = \sum \text{Credit}$) for all adjusting entries combined.

📸 Video summarized with SummaryTube.com on Dec 16, 2025, 01:27 UTC