Archive about 'Adjustments to Final Accounts'

Answers to Questions On True Or False On Final Accounts

Answers  to Questions On Final Accounts

True

False

1.0

The income statement shows either net profit or net loss for a particular period

X

2.0

Gains from the sale or exchange of assets are not considered as the revenue of the business

X

3.0

The salary paid in advance is not an expense [...]

Questions On True Or False On Final Accounts

QUESTIONS [ click here for ANSWERS]

True

False

1.0

The income statement shows either net profit or net loss for a particular period

2.0

Gains from the sale or exchange of assets are not considered as the revenue of the business

3.0

The salary paid in [...]

Expenses Unpaid For Accrual Purpose

This article deals with expenses unpaid for which are adjusting entries that for the final accounts or balance sheet
First, we look at what are some instances of expenses unpaid for,  how we take up such expenses and understand the accounting entries for over or under taking up of such accruals/accrued expenses.
 

Instances Of Expenses Unpaid, [...]

Listing Of Some Adjustments To Final Accounts And Balance Sheet

Once a Trial Balance has been extracted, next it is necessary to adjust the ledger accounts before preparing the final accounts and Balance Sheet
 

APPEND BELOW SOME OF THE ADJUSTMENTS TO THE FINAL ACCOUNTS AND BALANCE SHEET

Expenses paid in advance/ Prepayments

Expenses incurred but have not been paid

Income received in Advance

Accruing Income

Bad Debts written off and [...]

Answer To Accounting Test Question AOF No. 1 On Adjustments To Final Accounts

Answer to Accounting Test Question AOF No.1:

Insurance Account

2005

$

2005

$

Jun 30

Balance b/d

486

Jun 30

Advertising

39

Profit & Loss

411

Balance c/d

36

486

486

Motor Vehicle Account

2005

$

2005

$

Jun 30

Balance b/d

21,379

Jun 30

Disposal of motor vehicle

5,310

Balance c/f

16,069

21,379

21,379

Provision For Depreciation of Motor Vehicles Account

2005

$

2005

$

Jun 30

Disposal of motor vehicle

3,740

Jun 30

Balance b/d

8,310

Balance c/d

8,670

Profit & Loss

4,100

12,410

12,410

Disposal Of Motor Vehicles Account

2005

$

2005

$

Jun 30

Motor Vehicles

5,310

Apr 30

Bank

1,000

Provision for depreciation

3,740

Loss on Disposal

570

5,310

5,310

Repairs To Motor Vehicles Account

2005

$

2005

$

Jun [...]

Accounting Test Question AOF No. 1 On Adjustments To Final Accounts

Accounting Test Question AOF No 1 On Adjustments To Final A/c

Question:
Mr. Steven is a retailer whose accounting year ends on 30 June 2005. He has extracted a Trial Balance, before producing his final accounts and the following are some of the balance included in that Trial Balance:

Dr ($)

Cr ($)

Purchase Ledger Control Account

22,975

Insurance

486

Motor Vehicles at cost

21,379

Accumulated [...]

Answer to Accounting Test Question SP No 1 on Suspense Account

Answer to Accounting Test Question SP No 1 on Suspense Account
Begin by opening the suspense account. Which side? More debit is needed to balance the trial balance, so debit the suspense account with $56,717.
Then deal with the errors in order:

Sales returns should have been debited to the sales returns account and they have been credited [...]

Accounting Question Test SP No 1: Suspense Account

Accounting Test Question SP No. 1
Company ABC’s bookkeeping system is not computerised, and at 31 st December 2005. William , the bookkeeper was unable to balance the accounts. The trial balance totals were as follows:
Debit $ 2,024,100
Credit $ 2,080,817
Nevertheless, William proceeded to prepare draft financial statements, inserting the difference as a balancing figure in [...]

Accounting Treatment Of Revenues Received In Advance

Prepayments are expenses paid in advance and the unexpired up is accounted as current assets in the Balance Sheet.
Vice versa, revenues received in advance are payment received from customers for work not yet done or goods to be delivered at some future date.
So how do we treat revenues received in advance?

Revenues received in advance:

Are money [...]

What are Prepayments And Its Accounting Treatment?

During the accounting cycle, prepayments form one part of the adjusting entries. After the draft trial balance is extracted, the bookkeeper will then look for adjusting entries like prepayments  to be expensed off into the Income Statement?

So what are Prepayments?

Prepayments or prepaid expenses are expenses paid in advance.

They are actually economic resources which are the [...]