In manual accounting, the preparation of the adjusting entries is done following the preparation and completion of the worksheet. But, Sage 50 eliminates the preparation of the worksheet, thus, the fourth step in the accounting cycle is the preparation of the adjusting entries. Adjusting Entries are entries done at year-end to bring the general ledger balances to a current balance because of the lapse of time and because the revenues and expenses have accrued over the period. Adjusting entries are not correcting entries. Since Accounting is not an exact science, the possibilities of having erroneous entries are present. At this time, the accountant or bookkeeper is not aware of any error that possibly may have occurred that will affect the financial reports of the business. Businesses are established, with the intent of generating income. However, the business environments (owners, lenders, federal and state taxing authorities, prospective investors) demand that businesses report income and losses regularly for specific period of time.