We're Open
+44 7340 9595 39
+44 20 3239 6980

[Solved] Adjusting Entries

  100% Pass and No Plagiarism Guaranteed

[Solved] Adjusting Entries

Adjusting Entries

Could you read my paper and Could you give a specific example of an item we might find in regular accounting transactions where estimates are used?

Could you also show the journal entry we would use to record this type of estimate?

Are there any accounting standards that determine/guide how and when adjusting entries should be made?

Discussion: Adjusting Entries

The use of accounting estimates involves an approximation in financial statements of certain amounts to be debited or credited on items with no actual means of measurements such as provisions for bad debts and depreciation (Whittington, Delaney & Feller, 2011).

The use of accounting estimates affects the financial statements of a company in different ways. The balance sheet of a particular financial period should show the correct financial position of a business as at a specific date but the figures shown may be inaccurate since some of the current assets may valued at estimated amounts due to depreciation. (Beasley, Mark & Carcello, 2008). Thus, the balance sheet in such a case does not give an accurate reflection of the company’s financial position (Albrecht, 2007). Time changes and so do different items of the statements, therefore when the estimates are held constant from the previous calculations then the financial statement may cease to give correct accounting information required by the users given the irrelevancy of some estimates over time.

Additionally, the use of estimates may lead to inaccurate cost determination in some accounting methods such as the High-Low method of cost estimation hence affects the value statements (Albrecht, 2007). Finally given the difficulty correctly to estimate different provisions in the Trading Profit and Loss account, the reported profits or losses may be inaccurate.

In my opinion, use of estimates can make the management of a company manipulate accounting figures in order to meet their desired interests (Whittington et al., 2011). One of the primary practices by the management hiding behind accounting estimates is creative accounting, where they manipulate accounting records through different valuations and depreciations in order to report higher profits.

Moreover, where there are no strong internal control systems in an organization, the management can use unethical ways to conjure quick profits through optimistic asset estimates leading to a culture of corruption.


For a company to rely effectively on accounting estimates there should be a full disclosure of the estimates and periodic reviews in order to take care of variations in time (Beasley et al., 2008). Additionally, there should be an audit committee to check whether the financial statement and information on estimates shows a true and fair value of a company’s financial position.

100% Plagiarism Free & Custom Written,
Tailored to your instructions

International House, 12 Constance Street, London, United Kingdom,
E16 2DQ

UK Registered Company # 11483120

100% Pass Guarantee


View our samples written by our professional writers to let you comprehend how your work is going to look like. We have categorised this into 3 categories with a few different subject domains

View Our Samples

We offer a £ 2999

If your assignment is plagiarised, we will give you £ 2999 in compensation

Recent Updates


  • Title: [Solved] Adjusting Entries
  • Price: £ 89
  • Post Date: 2021-10-26T04:40:37+00:00
  • Category: Assignment Queries
  • No Plagiarism Guarantee
  • 100% Custom Written

Customer Reviews

[Solved] Adjusting Entries [Solved] Adjusting Entries
Reviews: 5

A masterpiece of assignment by , written on 2020-03-12

I have tried other sites for assignment help but the result that Insta Research has produced outweighs others. Since I am weak at writing and shaping the data logically, I am glad I took help from this site. Thanks to my writer for such a great quality of the assignment in Business.
Reviews: 5

A masterpiece of assignment by , written on 2020-03-12

The rates are a bit expensive for me of the essay writing service but the overall look is amazing. The references and formatting are done beautifully. So, I feel that the high rates are worth all these qualities. I want to thank you for great help.