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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See sample questions for grade 11
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.
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?
Which of the following adjustments will increase the net profit? (1) Outstanding Expenses (2) Accrued Income (3) Depreciation (4) Bad Debts
Which of the following is a revenue expense? (1) Purchase of Furniture (2) Wages (3) Building (4) Machinery
Which of the following is an adjustment for accrued income? (1) Rent received in advance (2) Interest earned but not received (3) Salary paid (4) Depreciation
Which of the following is an example of a prepaid expense? (1) Salary paid (2) Insurance premium paid for next year (3) Rent outstanding (4) Interest accrued
Depreciation is charged on ______ assets.
Fill in the blank: Adjustments are necessary to ascertain the true ______ and ______ of the business.
Fill in the blank: Depreciation is a ______ loss.
Fill in the blank: Income received in advance is a ______ for the business.
State whether the following is True or False: Adjustments affect both the Profit and Loss Account and the Balance Sheet.
State whether the following is True or False: Adjustments are made only for expenses and not for incomes.
State whether the following is True or False: Adjustments are made to ensure that the matching principle is followed in accounting.
State whether the following statement is True or False: Bad debts written off are added to the Sundry Debtors in the Balance Sheet.
