Adjustments in Preparation of Financial Statements
Commerce ⇒ Accountancy
Adjustments in Preparation of Financial Statements starts at 11 and continues till grade 12.
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A business has paid insurance premium of ₹12,000 for the year ending 31st March 2024, but the accounting year ends on 31st December 2023. What is the amount of prepaid insurance to be shown in the Balance Sheet?
A business has prepaid insurance of ₹2,000 and outstanding rent of ₹3,000. How will these be shown in the Balance Sheet?
A business received commission of ₹5,000, of which ₹1,000 is for the next year. What amount will be credited to the Profit and Loss Account?
A firm has closing stock of ₹50,000, which is not recorded in the trial balance. How will it be shown in the final accounts?
Explain the concept of matching principle in relation to adjustments.
Explain the effect of providing depreciation on machinery in the final accounts.
Explain the treatment of accrued income in the final accounts.
Explain the treatment of bad debts recovered in the final accounts.
Explain why closing stock is not shown in the trial balance if it is given as an adjustment.
If closing stock is given outside the trial balance, where will it be shown in the final accounts?
If rent paid during the year is ₹24,000, and ₹2,000 is outstanding, what amount will be debited to the Profit and Loss Account?
If the provision for doubtful debts is to be maintained at 5% of debtors and debtors are ₹40,000, what should be the provision?
State the accounting treatment for income received in advance.
State the accounting treatment for prepaid rent in the final accounts.
What is meant by 'adjustments' in the preparation of final accounts?
What is the double effect of outstanding salary in the final accounts?
What is the effect of depreciation on the value of assets in the Balance Sheet?
What is the purpose of making adjustments for outstanding expenses?
