He listened carefully as I explained the matching principle, accrual-type adjusting entries, and reversing entries. As soon as I had finished, he phoned the shipping company and asked that his billing period be changed to cover the calendar month. They were pleased to make the change.
Next, the owner called his bank and asked if the bank would be able to deduct the current month's loan interest from the company's checking account on the last day of each month. The bank was pleased to arrange for this procedure.
In less than 15 minutes, the owner eliminated the need for me to calculate/estimate the amounts for two adjusting entries every month. Soon, each month's actual amounts would be arriving automatically.
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