What Accounts Are Never Adjusted in the Adjustment Process?

by Jennifer VanBaren; Updated September 26, 2017
Certain accounts are never adjusted during the adjusting process in accounting.

The accounting process is made up of many key steps, and always includes performing adjusting entries. These entries are completed at the end of a period to update balances in specific accounts in the general ledger. It is common for certain types of accounts to have adjusting entries made to them; there are certain accounts, however, that are never adjusted.

Cash

When adjusting entries are made cash is never paid out or received. The Cash account, in the general ledger, reflects the balance of all cash receipts and all payments made. When the adjusting entries are recorded, the Cash account is never affected; the only time a transaction modifies this account is when cash is physically paid out or physically received.

Accounts Receivable and Payable

Accounts Receivable is an asset account, while Accounts Payable is a liability account. These two accounts are also never affected during the adjustment process. Accounts Receivable is an account that tracks amounts owed to the company from sales the company made on account; the company provided goods or services to account holders and allowed them to pay the invoices later. Accounts Payable is an account that represents all money owed to vendors, generally for goods or services received by the company. Transactions are only made in these two accounts when a physical transaction actually occurs.

Fixed Assets

Fixed assets are assets of large value such as machinery, equipment, land and buildings. Fixed asset accounts are never affected during the adjusting process. One common adjusting entry made is to record depreciation. When this is recorded, an adjusting entry is made to Depreciation Expense and to a contra-asset account normally called Accumulated Depreciation. This account is viewed with the corresponding asset it relates to. For example, if depreciation of $1,000 is recorded for a machine with a value of $20,000, the entry is made by debiting Depreciation Expense-Machine and crediting Accumulated Depreciation-Machine. When the Machine account is viewed, the balance is $20,000; however when a person analyzes this information, the book value is calculated to be $19,000. This is calculated by using the amount of $20,000 and subtracting the Accumulated Depreciation of $1,000.

Capital

A capital account is used to record owner’s investments in a business; a separate account is used to record owner’s withdrawals. The only transaction that is normally placed in an owner’s capital account is the amount of net profit made for a period. This is not considered an adjusting entry, though, and therefore the capital account never gets adjusted during this process.

About the Author

Jennifer VanBaren started her professional online writing career in 2010. She taught college-level accounting, math and business classes for five years. Her writing highlights include publishing articles about music, business, gardening and home organization. She holds a Bachelor of Science in accounting and finance from St. Joseph's College in Rensselaer, Ind.

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