Case Accounting Cycle BW Travel and Tours is a travel agency that offers international and local travel packages. The company is owned and operated by Bryson Woods. The closing balances at the end of August 2021 and the chart of accounts are shown below. BW Travel and Tours Balance Sheet As at August 31, 2021 Liabilities Assets Cash $14,230 Accounts Payable $11,700 $16,200 Accounts Receivable $8,520 Unearned Revenue $0 Bank Loan $25,000 Prepaid Insurance $65,800 Equipment -$9,600 Total Liabilities Accumulated Depreciation $52,900 Woods Capital $26,050 $78,950 Total Liabilities & Owners' Equity Total Assets $78,950 Account Description Account # REVENUE ASSETS Cash 101 Service Revenue Accounts Receivable 105 EXPENSES Prepaid Insurance 110 Advertising Expense Equipment 120 Depreciation Expense Accumulated Depreciation 125 Insurance Expense LIABILITIES Interest Expense Accounts Payable 200 Salaries Expense Interest Payable 205 Telephone Expense Salary Payable 210 Travel Expense Unearned Revenue 215 Rent Expense Bank Loan 220 OWNER'S EQUITY Woods Capital 300 Woods Withdrawals 310 Income Summary 315 For the month of September 2021, BW Travel and Tours had the following transactions: Sept 1 Bryson invested $15,000 cash and equipment valued at $12,500 into the business. Prepaid $4,500 for insurance for one year. Sept 1 Sept 1 Paid $1,950 cash for September's rent. Sept 2 Provided travel package to group of travellers; they paid $22,500 now and will pay $4,500 later. Sept 5 Recorded travel expenses for $9,100 to be paid next month. Sept 11 Purchased equipment with $13,000 cash. Sept 15 Paid $5,850 cash to reduce the balance of accounts payable. Sept 18 Received $4,260 cash from customers for the travel services provided last month. Received a telephone bill for $880 which will be paid next month. Sept 20 Sept 23 Paid $4,150 cash for employee's salaries. Sept 26 Received $26,700 cash in advance from travellers for travel services to be provided next month. Sept 28 Paid $2,530 advertising expense for the promotion of the travel and tours in the month of September. Sept 29 The owner withdrew $6,550 cash for personal use. Sept 30 Paid $833 cash for the bank loan which included $625 principle and $208 interest. Sept 30 Received a loan from the bank for $20,000 Note: This amount is due in 2 years plus accrued interest at 10% Account Description Account # 400 500 510 515 520 545 550 555 560

Definition Definition Entries made at the end of every accounting period to precisely replicate the expenses and revenue of the current period. This is also known as end of period adjustment. It can also refer to financial reporting that corrects errors made previously in the accounting period. Every adjustment entry affects at least one real account and one nominal account.