The journal

Driftwood Coffee Co. · period end

Library

The accounting cycle · stages 3 to 6

The entries are in. Now make them speak.

The journal balanced, but the books aren't done telling the truth. Some costs were used up this week without anyone writing a cheque — rent, supplies, wages owed. Find those three, adjust for them, and the statements rebuild themselves around your work.

Before you adjust, audit it. One line below was posted to the wrong account during the week — the totals still tie, but the classification is off. Click the account you think is misplaced.

Driftwood Coffee Co.

Unadjusted Trial Balance

As at June 11, 2026

AccountDebitCredit
Totals
In balance — debits equal credits

Good eye. Now correct it — in ink, on the record.

The ₱1,800 sits in Supplies, but it was the espresso machine repair — that's a Repairs Expense, consumed the moment the technician left. Move it with a correcting entry.

AccountDebitCredit
Need a nudge?

"It balances — but balanced isn't finished. Rent was prepaid, supplies got used, the baristas earned wages we haven't paid. Those costs belong to this period whether cash moved or not. That's what adjustments fix."

Audit the books first — catch and correct the misposting.

Three things happened that no receipt announced. Read each note, choose the two accounts, enter the amount. Sage checks each one.

0 of 3 adjustments posted

Post all three to unlock the statements.

Driftwood Coffee Co.

Income Statement

For the period ended June 11, 2026

Revenue
Expenses
Total expenses
Net income

This figure doesn't stay here. It flows into Owner's Capital on the balance sheet. →

Revenue earned, less what it cost to earn it — adjustments included.

Driftwood Coffee Co.

Balance Sheet

As at June 11, 2026

Assets
Total assets
Liabilities
Total liabilities
Equity
Owner's Capital, opening
+ Net income for the period
Total equity
Liabilities + Equity
Assets = Liabilities + Equity — the sheet balances

"There it is — the accounting equation on its own two feet, adjustments and all. Close the period and Driftwood's first week is in the books."

The equation holds. One step left — close the temporary accounts.

Revenue and expense accounts are temporary — they tell this period's story, then reset to zero so next week starts clean. Close each into Owner's Capital.

PERIOD CLOSED
Post both closing entries to seal the period.