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Chapter three adjusting the accounts part one during this presentation we will learn more about adjusting entries and we will be talking specifically about prepaid expenses adjusting entries adjusting entries are the journal entries we post at the end of each accounting period to bring our books into alignment with the accrual basis of accounting we do this process for two reasons the passage of time and the usage why do we need adjusting entries we need adjusting entries for the following three reasons first some events are not recorded on a daily basis because itamp;#39;s time wasting and expensive to do so for example an accountant in a company cannot prepare a journal entry every time an employee uses office supplies because itamp;#39;s time wasting and very hard to keep track second some costs expire with the passage of time rather than as a consequence of frequent use for example if we buy new a one-year insurance premium wasnamp;#39;t we use it or not our insurance validity w