A finished ACC-240 Topic 3 accrual adjustment schedule example, turning month-end facts into calculated adjusting entries and setting accrual income beside the cash-basis figure. Searches like "acc 240 topic 3 assignment example", "acc240 topic 3 sample" and "acc-240 topic 3 example" land here.
What a finished ACC-240 Topic 3 accrual adjustment schedule looks like
The finished schedule starts from an unadjusted trial balance and a short list of month-end facts: three months of rent paid in advance, a supplies count lower than the ledger shows, equipment in its first month of use, two days of wages earned and unpaid, and work completed but not yet billed. Each fact becomes one adjusting entry, journalized with its calculation beside it, so the reader sees one month of rent taken from the prepaid balance and a supplies figure derived from the count. Every adjustment touches one balance sheet account and one income statement account, and the schedule says which. An adjusted trial balance follows. Amounts throughout are illustrative. A short comparison shows net income under accrual beside the cash figure, and names each difference.
How an ACC-240 Topic 3 example is structured
The schedule reads from the facts to the adjusted balances. It opens with the unadjusted trial balance, reproduced so the starting figures are on the page. A list of month-end facts follows, each stated as a business event rather than as an entry, because deciding what the event requires is the skill being marked. The adjustments come next, grouped as deferrals and accruals, each with its calculation, its journal entry and a line naming the balance sheet and income statement accounts it links. An adjusted trial balance is then prepared, with the changed accounts flagged so the reader can see what moved. A short reconciliation sets accrual net income beside the cash-basis figure and attributes the gap to specific adjustments. The final paragraph states which adjustments rest on estimates, depreciation in particular, and which rest on counts or contracts.
Month-end facts before entries
The schedule states each situation in plain business terms first, since deciding that an event needs an adjustment comes before recording the adjustment itself.
Deferrals and accruals kept apart
Prepaid rent and supplies used unwind earlier cash payments, while unpaid wages and unbilled fees record amounts that no cash has touched yet.
The calculation beside each entry
One month of a three-month prepayment, or the ledger supplies balance less the counted amount, appears next to the entry so the figure can be verified.
Cash never appears in an adjustment
Every adjusting entry pairs a balance sheet account with an income statement account, and an adjustment that debits or credits cash signals a recording error.
Accrual income beside cash income
The closing comparison shows how each adjustment moves reported income away from what the bank balance alone would suggest, one item at a time.
Where marks go in ACC-240 Topic 3
The adjustments that go missing are the ones that cost most here. A schedule omitting accrued wages understates both expense and liabilities, so two statements are wrong from a single gap. Adjusting entries that debit or credit cash have confused an adjustment with a payment and are marked as errors. Prepaid rent expensed in full in the month it was paid produces the cash-basis answer the topic is teaching students to move past. Depreciation recorded as a reduction of the equipment account itself, rather than through accumulated depreciation, loses the original cost a later reader needs. Entries without the calculation beside them lose credit in many sections even when correct, because a supplies adjustment with no count shown cannot be told apart from a guess.
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ACC-240 Topic 3 questions, answered
How does a deferral differ from an accrual?
Timing relative to cash. A deferral adjusts an amount where cash moved first and the expense or revenue comes later, such as rent paid in advance being used up month by month. An accrual records an expense or revenue that has happened before any cash moves, such as wages earned by employees on the last days of the month and paid in the next.
Why does depreciation go to accumulated depreciation?
Because the original cost of the asset stays informative. Crediting a contra account leaves equipment at what it cost and records the portion used up separately, leaving both the investment and the consumed portion visible to a reader. Reducing the equipment account directly would lose that history and hide how far through its life the asset has run.
Does every adjustment involve an estimate?
No, and the example separates them. Prepaid rent and accrued wages come from contracts and payroll records, so the amounts are known. A supplies adjustment rests on a physical count. Depreciation rests on an estimated useful life and residual value, which is a judgment the business makes. Saying which adjustments are measured and which are estimated is part of what the schedule shows.