Definition · the close
Adjusting journal entry
Adjusting journal entry is an entry made at period end to record accruals, deferrals, depreciation, or corrections before reporting. For adjusting journal entry, the important details are the accounting period, source evidence, reviewer, materiality threshold, and control purpose that make the treatment auditable during close, reporting, and later review.
Also known as AJE, adjusting entry, adjustment entry
Why it matters
Understanding adjusting journal entry matters because close, reconciliation, and audit work depend on consistent timing, source evidence, review thresholds, and ownership. A loose definition creates avoidable rework. When the term is tied to a source system, owner, and review cadence, it becomes easier to audit assumptions, catch changes early, and keep operators aligned.
In practice
Close example
Teams use adjusting journal entry during close, review, or audit support when a balance or transaction needs evidence. The controller should be able to trace the number to source records, timing, reviewer, and control threshold.
Review example
Adjusting journal entry should be reviewed whenever the source system, calculation logic, time period, or decision owner changes. That keeps the definition useful instead of letting it drift into a label.
In practice, teams should define adjusting journal entry with a clear source, owner, time period, and decision before they use it in reporting, planning, or operating reviews.
Understanding adjusting journal entry matters because close, reconciliation, and audit work depend on consistent timing, source evidence, review thresholds, and ownership. A loose definition creates avoidable rework. When the term is tied to a source system, owner, and review cadence, it becomes easier to audit assumptions, catch changes early, and keep operators aligned.
A strong workflow for adjusting journal entry separates the definition from the action: first agree what the term means, then decide how it is measured, when it changes, and who is accountable for the next step.
FAQ
What is an adjusting journal entry?
Adjusting journal entry is an entry made at period end to record accruals, deferrals, depreciation, or corrections before reporting. For adjusting journal entry, the important details are the accounting period, source evidence, reviewer, materiality threshold, and control purpose that make the treatment auditable during close, reporting, and later review.
What are the main types of adjusting entries?
For adjusting journal entry, the useful categories depend on an entry made at period end to record accruals, deferrals, depreciation, or corrections before reporting. Teams should name the categories they use, map each one to source data, and keep the same taxonomy across reporting periods.