Aqid ERPMeaning
Adjusting entries (قيود التسوية) are the journal entries posted at the end of a month or year before the statements are drawn up. They exist because accrual accounting records income when it is earned and expenses when they are incurred, while invoices and payments arrive on their own timetable. Without them, a year's profit would depend on when bills happened to be paid.
The usual ones are five: depreciation of fixed assets; accrued expenses, such as salaries or electricity used but not yet billed; prepaid expenses released month by month, such as rent paid a year ahead; deferred revenue released as the service is delivered; and provisions, such as end-of-service benefits or doubtful debts. Each adjusting entry touches one balance sheet account and one income statement account, and most are reversed or repeated in the next period.
Also called: adjusting entry · period-end adjustments · year-end adjustments · قيود التسوية
Example
Al Noor pays a year's warehouse rent of 60,000.00 on 1 October 2026. At 31 December three months have been used, so the adjusting entry debits Rent Expense 15,000.00 and credits Prepaid Rent 15,000.00; the remaining 45,000.00 stays an asset and is released over the next nine months.