Adjust

Record adjusting entries for "$ARGUMENTS". Ensure revenue and expenses are recognized in the correct period by recording accruals, deferrals, depreciation, and estimates.

Prerequisites

Read .metapowers/accounting/$ARGUMENTS/04-trial-balance.md for the unadjusted trial balance.

Process

1. Identify required adjustments:

   • Accrued revenues — revenue earned but not yet billed or received
   • Accrued expenses — expenses incurred but not yet paid (wages, interest, taxes)
   • Prepaid expenses — payments made in advance that need to be expensed over time
   • Unearned revenue — cash received in advance that needs to be recognized as earned
   • Depreciation — allocate the cost of long-lived assets over their useful lives
   • Allowances & estimates — bad debt allowance, warranty reserves, inventory write-downs

2. Create adjusting journal entries:

   • For each adjustment, record:
     • Type — accrual, deferral, depreciation, or estimate
     • Accounts — debit and credit accounts
     • Amount — calculated adjustment amount with supporting calculation
     • Rationale — why this adjustment is necessary
   • Number entries sequentially (AJE-001, AJE-002, etc.)

3. Validate adjustments:

   • Each adjusting entry must have equal debits and credits
   • Verify that no operating transactions are included (those belong in Phase 2)
   • Confirm depreciation methods and useful lives are consistent with policy

4. Write the artifact to .metapowers/accounting/$ARGUMENTS/05-adjust.md with sections:

   • Adjusting Journal Entries — all entries with type, accounts, amounts, and rationale
   • Adjustment Summary — total adjustments by type
   • Impact Analysis — how adjustments affect net income and key account balances

Output

The adjustments written to .metapowers/accounting/$ARGUMENTS/05-adjust.md. Present a summary highlighting:

• Number of adjusting entries by type
• Net impact on net income
• Largest adjustments by dollar amount