EXAMPLES OF ADJUSTMENTS
A. To record a bank service charge (for example: monthly service fee, charge for new checks
ordered or for an NSF (returned item fee (not the amount of the NSF check)).
Bank Charge for printing new checks
FACT:
Rcrd chrg for new checks
DESCRIPTION:
Account
$ 1111.0X
7-0350.05
Sub Account
Account Name
N/A
Checking
0720
Bank Fees & Interest
Receipts
Disbursements
$
55.00
$
55.00
B. To record interest earned.
For the checking account - Interest earned this accounting period was $25.
FACT:
Record January interest earned - Checking
DESCRIPTION:
Account
Sub Account
Account Name
Receipts
Disbursements
$ 1111.0X
N/A
Checking
$
25.00
7-0350.05
3431
Bank Fees & Interest
$
25.00
NOTE:
Do NOT “Net out” the amounts and post the difference. For instance; when posting examples A & B
above, do not just post $30 ($55 - $25 = $30) in disbursements. However, you may combine these
two entries into one adjustment and post monthly interest and service fees on the same adjustment,
recording each of them as shown in the examples.
C. To correct a posting error of a receipt.
FACT:
A cash receipt (C/R) posted to Adopt-A-Class (6-0050) should have been
posted to the Adopt-A-Class/Gr. 3, Account (6-1003)
Reclassify C/R #_____ to correct account
DESCRIPTION:
Account
6-0050
6-1003
Sub Account
Account Name
3440
Adopt-A-Class
3440
Adopt-A-Class/Gr.3
$
$
Receipts
-40.00
40.00
Disbursements
D. To correct the amount of a cash receipt after the deposit has been made to the bank.
FACT:
The school receives notice from the bank that the deposit amount is
incorrect. After researching you discover a cash receipt (C/R) was posted
as $2.50 when it should have been $2.05. The account is Media Book Fair
(5-2100.05). You will need to reverse the original entry and then record the
correct amount.
Correct/decrease the amount of C/R #____
DESCRIPTION:
Account
$-1111.0X
5-2100.05
$-1111.0X
5-2100.05
Appendix C
Sub Account
N/A
3482
N/A
3482
Account Name
Checking
Media Book Fair
Checking
Media Book Fair
Page 1 of 7
$
$
$
$
Receipts
-2.50
-2.50
2.05
2.05
Disbursements
Revised 3/14/11
E. To record a cash receipt after the deposit has been made to the bank.
FACT:
The bank counted $20.00 more in cash than the amount recorded on the
deposit slip. Research determines the account this money belonged to is 62614.00 Field Trip. This cash receipt has not been entered into the
accounting system, but the money had been included in the deposit.
To record additional cash included with the XX/XX/XX bank deposit.
DESCRIPTION:
Account
Sub Account
Account Name
Receipts
Disbursements
$-1111.0X
N/A
Checking
$
20.00
6-2614.00
3440
Field Trip
$
20.00
NOTE:
1.) Once money/deposit has been finalized and gone to the bank, you cannot write a receipt to
record funds that have gone to the bank or it will distort the total for the current deposit; it has to
be an adjustment.
(2.) If the source cannot be determined, it should be recorded to the Cash Over account (70350.10) noting the deposit date.
F. To record unidentified cash shortage for a deposit.
FACT:
The bank has notified you that they had $5 less in a deposit than you had
recorded on your deposit slip. Research and examination of source
documents could not determine the reason.
Undntfd 3/03/11 dpst shrtg
DESCRIPTION:
DOCUMENTATION: Properly approved requisition form and notice from the bank.
Account
Sub Account
Account Name
Receipts
Disbursements
$-1111.01
N/A
Checking – BOA
$
-5.00
7-0350.10
3495
Cash Over
$
-5.00
NOTE:
The account number has been changed from the bank fees (7-0350.05) to 7-0350.10.
G. To reclassify an NSF check into the Accounts Receivable (A/R) account ($1130.00).
The amount of the NSF check is $25.00, and the maker’s name is J. Smith.
FACT:
Reclassify NSF check by J. Smith to A/R
DESCRIPTION:
Account
$-1111.0X
$-1130.00
Sub Account
Account Name
N/A
Checking
N/A
Accounts Receivable
$
$
Receipts
-25.00
25.00
Disbursements
H. To write off an NSF check after every attempt has been made to collect it AND the check
has already been reclassified into the Accounts Receivable account.
FACT:
The amount of the NSF check is $25.00. It was originally credited to
account 6-2613, sub account 3440.
Write-off NSF check – J. Smith
DESCRIPTION:
Account
$-1130.00
6-2613.00
Appendix C
Sub Account
Account Name
N/A
Accounts Receivable
3440
Field Trip
Page 2 of 7
$
$
Receipts
-25.00
-25.00
Disbursements
Revised 3/14/11
I. To write off an NSF check after every attempt has been made to collect AND the check
has not been reclassified into the accounts receivable account. Refer to Chapter 3 –
Control of Cash Resources regarding procedures for un-collectible returned checks.
FACT:
DESCRIPTION:
Account
$-1111.0X
6-2613.00
The amount of the NSF check is $28.00. It was originally credited to
account 6-2613, sub account 3440, makers name is S. Jones.
Write-off NSF check – S. Jones
Sub Account
Account Name
Checking
N/A
Field Trip
3440
$
$
Receipts
-28.00
-28.00
Disbursements
J. To re-classify an NSF check after the State Attorney’s Office was successful in collecting
and it is recorded in the system as an accounts receivable.
FACT:
The amount of the NSF check is $58.
DESCRIPTION:
NSF Cllcted by stt Attrny frm Jane Doe
Account
Sub Account
Account Name
Receipts
Disbursements
$-1130.00
N/A
Accounts Receivable
$
-58.00
$-1111.XX
N/A
Checking
$
58.00
NOTE:
Treat the check from the State Attorney’s office as a redeposit. If however, the check from
them includes fees that they also collected on your school’s behalf, then write off the NSF check
as detailed in example H and receipt the check as new money, with separate line items for the
NSF check amount and the bank fee reimbursement.
K. To reclassify the money held in a vocational deposit account to the actual tuition account.
FACT:
DESCRIPTION:
Account
6-2360.01
8-5650.03
The deposit amount was $ 400.00 and needs to be reclassified into the
tuition account.
Reclassify deposit money into the tuition account
Sub Account
Account Name
3495
Advanced Registration
3495
Tuition-Adult/Genl/Res
$
$
Receipts
-400.00
400.00
Disbursements
L. To reclassify the change fund money that was accidently included in the revenue from
sales.
The Book Fair receipts included the change fund of $50.
FACT:
Reclassify CR# _____, incldd chng fnd
DESCRIPTION:
Account
5-2100.05
$-1113.00
Sub Account
Account Name
Media-Book Fair
3482
Change Fund
N/A
$
$
Receipts
-50.00
-50.00
Disbursements
M. To record an intra-account transaction (a purchase from one class, club or department to
another).
The science department purchased books from the book fair for $50.00.
FACT:
Book fair purchases by Science Department
DESCRIPTION:
Account
5-3200
5-2100.05
Appendix C
Sub Account
Account Name
0790
Pre K-12 Science
3482
Media Book Fair
Page 3 of 7
Receipts
$
Disbursements
$
50.00
50.00
Revised 3/14/11
N. To correct a posting error of a disbursement.
FACT:
The expenditure was incorrectly charged to the Ruth Eckerd F/T (6-2613.02)
for admissions, instead of the Sea World F/T account (6-2613.15).
Reclassify Voucher #_____ to correct account
DESCRIPTION:
Account
6-2613.02
6-2613.15
Sub Account
Account Name
0790
Ruth Eckerd Field Trip
0790
Sea World Field Trip
Receipts
Disbursements
$
-35.00
$
35.00
O. To re-appropriate (share) expenses after the initial purchase has been made.
FACT:
The G/A account (7-0350.00) purchased postage stamps, knowing that
some departments or groups would want to buy 100 count rolls for mailings.
DESCRIPTION:
Re-appropriate expense
DOCUMENTATION: Properly approved purchase requisition forms.
Account
Sub Account
Account Name
Receipts
Disbursements
7-0350.00
0510
General Administration
$
-132.00
5-5000.00
0510
Yearbook
$
88.00
4-4810.00
0510
Student Council
$
44.00
NOTE:
This is not a purchase as such, it is a reassignment of expense from one account to another to
reduce the original expense charged.
P. To record a cash disbursement that was erroneously cleared from the accounting
system.
FACT:
During the bank reconciliation process of clearing checks, a check
accidentally was entered as having cleared the accounting system. Check
number 32, to the Home Depot in the amount of $135.00 must be reentered into the accounting system.
Re-Rcrd ck # 32 –accdntlly clrd frm accntng systm
DESCRIPTION:
Account
Sub Account
Account Name
Receipts
Disbursements
$-1111.0X
N/A
Checking
$
135.00
7-0350.00
0510
General Administration
$
135.00
NOTE:
This check will not appear on the Outstanding Check list generated by the accounting system
and will have to be manually added to that list until it really does clear the bank.
Q. To Reverse an adjustment.
Reverse adjustment to M above.
FACT:
1) To reverse an adjustment, use the same accounts, the same amounts, in the same columns
(receipts/disbursements), and input a negative sign in front of the amounts.
2) If the amount in the original adjustment was negative, make it a positive amount in the
reversing entry.
3) If the amount in the original adjustment was positive, use the minus sign in front of the
amount in the reversing entry.
DESCRIPTION:
Reverse Adj. # ______
Account
5-3200
5-2100.05
Appendix C
Sub Account
Account Name
0790
Pre K-12 Science
3482
Media Book Fair
Page 4 of 7
Receipts
$
Disbursements
$
-50.00
-50.00
Revised 3/14/11
R. To record difference amount of a check to a vendor.
There are two scenarios –
Scenario #1
FACT:
The sponsor/teacher takes a $100 check to a vendor; Publix for example
and the bill is $4.35 less than the check amount. The vendor gives the
teacher change and the teacher submits the signed receipt and change to
the bookkeeper. Take the following steps:
1) The $4.35 will be treated as a re-deposit into the bank. Do NOT write a receipt in the
accounting system.
2) Create an adjustment to record the unspent money back into the bank account and the
account from which it was taken as a disbursement.
DESCRIPTION:
Adj CD # ______ - chng given
Account
Sub Account
Account Name
Receipts
Disbursements
$ 1111.xx
N/A
Checking
$
-4.35
6-0050.xx
0510
Adopt-A-Class
$
-4.35
NOTE #1:
The check will clear the bank as $100 and you will clear it in the system for that amount.
NOTE #2:
A negative disbursement will result in the dollar sign balance to be increased which will correlate
to the re-deposit. Brackets or minus signs under receipts or disbursements columns will have the
opposite effect on account balances than a receipt or disbursement would have.
Scenario #2
FACT:
The sponsor/teacher takes a $100 check to a vendor; Wal-Mart for example
and the bill is $4.35 less than the check amount. The vendor processes the
check electronically for the lesser amount and gives the teacher the check
back, usually marked “void”. The teacher submits the signed receipt and
cancelled check to the bookkeeper. Take the following steps:
1) Note that the check will clear the bank as $95.65. IMPORTANT REMINDER: Make sure
that you clear the check in the accounting system as it was originally recorded - $100.
2) Create an adjustment to reduce the disbursement amount back into the bank account and
the account from which it was taken.
DESCRIPTION:
Adj CD # ______ - cleared bank for a lesser amount
Account
Sub Account
Account Name
Receipts
Disbursements
$ 1111.xx
N/A
Checking
$
-4.35
6-0050.xx
0510
Adopt-A-Class
$
-4.35
NOTE #3:
Warn the teacher/sponsor that it is against the law for them to alter the amount of the check,
especially if the bill should come to more than the check amount. Any minimal difference should
be paid by them and then reimbursed through petty cash.
Appendix C
Page 5 of 7
Revised 3/14/11
EXAMPLES OF TRANSFERS
A. To post a correction of a prior year’s error.
FACT:
Revenues for the Book Fair were incorrectly posted to the General
Administration account in the previous year in the amount of $55.00.
DESCRIPTION:
Reclassify Book Fair revenue from last school year
Account
7-0350.00
5-2100.05
Sub Account
Account Name
0950
General Administration
0950
Media Book Fair
To
$
$
From
55.00
55.00
B. To transfer money between cash accounts when opening a checking account. The “old”
bank will issue you a bank check which you will treat as a “re-deposit” and this transaction should
be entered into the accounting system.
FACT:
A new checking account was opened in the amount of $1,000.00 to cover
start up costs.
DESCRIPTION:
Open new checking account. Transfer of money
Account
$1,111.00
$1,111.01
Sub Account
Account Name
N/A
Checking
N/A
Checking
To
$
$
From
1,000.00
1,000.00
C. To close a club account that has been inactive for two years.
FACT:
The Young Astronauts Club is no longer active and has an outstanding
balance of $ 15.79.
DESCRIPTION:
To close the Young Astronauts Club
Account
4-6500.00
7-0350.00
Sub Account
Account Name
0950
Young Astronauts Club
0950
General Fund
To
$
$
From
15.79
15.79
D. To close inactive Trust account.
FACT:
An Adopt-a-Class account did not spend all of its funds, the solicitation
letter/brochure did not specify that unspent funds could be carried forward to
the next year; the donor does not want the money back and has instructed
DESCRIPTION:
Account
6-1003.00
6-1501.00
Appendix C
you to keep the funds and use them at the principal’s discretion.
Close inactive Trust account
Sub-Account
Account Name
0950
Adopt-A-Class-Gr.3
0950
Adopt-A-School
Page 6 of 7
To
$
$
From
24.00
24.00
Revised 3/14/11
E. To close an extension account(s) at year end.
FACT:
There are extension account balances that you want to clear at the end of
DESCRIPTION:
Account
7-0350.05
7-0350.85
7-0350.00
the year, so that you can start with a zero balance for the new fiscal year.
Close extnsn accnts to main accnt
Sub-Account
Account Name
0950
Banking fees & intrst
0950
Tele chrg/reimbrsmnt
0950
General Adminstrtn
To
$
$
$
From
879.50
6.25
885.75
F. To move an amount from one account to another, such as a share of profits or donations.
FACT:
DESCRIPTION:
Account
5-0600.00
4-1650.00
The Drama Department, in partnership with the Drama Club, presented a
musical. All revenues were posted to the Drama Department. The following
entry gives the Drama Club its share of the profits.
To transfer Drama Club’s portion of profits from the musical
Sub-Account
Account Name
0950
Drama Department
Drama Club
0950
To
$
$
From
100.00
100.00
G. To reverse a transfer.
FACT:
A transfer transaction had been processed to “correct” a posting error. This
should have been an adjustment, so now you have to reverse the transfer so
that the activity will not show on the financial statement.
DESCRIPTION:
Reverse TR #_______
Account
Sub-Account
Account Name
To
From
6-0050.00
0950
Adopt-A-Class
$
-45.00
Adopt-A-Class/Art
6-0050.04
0950
$
-45.00
NOTE:
When reversing a transfer, you must put a negative sign/symbol in front of the amounts as they
were originally entered, to literally reverse the entry.
Appendix C
Page 7 of 7
Revised 3/14/11