An accrual-type adjusting entry is a journal entry recorded at the end of a reporting period that alters the amount of revenues or expenses recorded in the income statement. The four types of accrual-type adjusting entries are:
- An expense increase for expenses that have been incurred, but for which no supplier invoice has yet been received.
- An expense decrease for expenses that have been recognized, but which have not yet been incurred.
- A revenue increase for revenues that have been earned, but for which no customer invoice has yet been created.
- A revenue decrease for revenues that have been recognized, but which have not yet been earned.