Many of the business transactions affect the net income of more thanone period. Clearly, if the income statement is to portray a realistic net in-come figure based upon accrual accounting, all revenues earned during theperiod and all expenses incurred must be shown. Therefore, it is often nec-essary to adjust some account balances at the end of each accounting periodto achieve a proper matching of costs and expenses with revenue. Theadjusting step occurs after the journals have been posted and a trial balanceof ledger accounts has been taken, but before financial statements areprepared.
Adjusting entries made to align revenue and expense with the appro-priate periods consist of four types:
（1） Apportioning recorded costs to periods benefited.
（2） Apportioning recorded revenue to periods in which it is earned.
（3） Accruing unrecorded expenses.
（4） Accruing unrecorded revenue.
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