Which Accounts Would Normally Not Require An Adjusting Entry?
What Account is Never Affected By Adjusting Entries T here are four types of Accou nts , b ut out of these four accounts, o ne account w hich is never required an Adjusting Entry is a cash accou n t . Other three accou nts are not usually required an adjusting entry. All of t h ese are expressed b elow: 1. Cash Account Cash Account is never required an adjusting entry as it follows Cas h Basis of Accounting System and not Accrual Basis of Accounting System . We record only t hose tra nsactions in w hich cash is i nvolved. So, t here is not need to make Adjustments for t he accou nts involved in a b usi ness transaction under Cas h System of Accou nting. 2. Capital Or Owner’s Equity Capital , Owner’s Equity or Equity or Capital Stock is usually not required an adjusting entry. At t h e end of the accounting period, we prepare Statement of Retained Earnings . H ere, usually, we record opening capital and t he n add net profit or net income and de...