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प्रश्न
What are adjusting entries?
उत्तर
Adjustment entries are the journal entries made at the end of the accounting period to account for items which are omitted in the trial balance and to make adjustments for outstanding and prepaid expenses and revenues accrued and received in advance.
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संबंधित प्रश्न
What is outstanding expense?
What is prepaid expense?
What are accrued incomes?
What is the provision for discounts on debtors?
For the fol owing adjustments, pass adjusting entries:
- Outstanding wages ₹ 5,000.
- Depreciate machinery by ₹ 1,000.
- Interest on capital @ 5% (Capital: ₹ 20,000)
- Interest on drawings ₹ 50
- Write off bad debts ₹ 500
On preparing the final accounts of Suresh, the bad debt account has a balance of ₹ 800 and the sundry debtor account has a balance of ₹ 16,000 of which ₹ 1,200 is to be written off as further bad debts. Pass adjusting entry for bad debts. And also show how it would appear in the profit and loss account and balance sheet.
From the following trial balance of Ramesh as of 31st March 2017, prepare the trading and profit and loss account and the balance sheet as of that date,
| Particulars | Debit ₹ | Credit ₹ |
| Stock (01.04.2016) | 40,000 | |
| Purchases | 85,000 | |
| Sales | 1,90,000 | |
| Sundry creditors | 48,000 | |
| Furniture and fixtures | 65,000 | |
| Debtors | 45,000 | |
| Cash at bank | 21,000 | |
| Wages | 37,500 | |
| Drawings | 15,000 | |
| Telephone charges | 3,000 | |
| Bad debts | 2,000 | |
| Provision for bad debts | 2,500 | |
| Discount received | 3,000 | |
| Capital | 85,000 | |
| Advertising | 15,000 | |
| 3,28,500 | 3,28,500 |
Adjustments:
- The closing stock was valued at ₹ 35,000
- Unexpired advertising ₹ 250
- Provision for bad and doubtful debts is to be increased to ₹ 3,000
- Provide 2% for discount on debtors.
Prepare trading and profit and loss account and balance sheet from the following trial balance of Madan as of 31st March 2018.
| Debit balance | ₹ | Credit balance | ₹ |
| Sundry debtors | 61,000 | Capital | 70,000 |
| Plant and machinery | 80,000 | Purchases return | 2,000 |
| Bank charges | 4,200 | Sales | 2,55,000 |
| Wages | 7,000 | Bank overdraft | 77,000 |
| Sales return | 5,000 | ||
| Purchases | 1,52,000 | ||
| Opening stock | 30,000 | ||
| Drawings | 22,000 | ||
| Establishment expenses | 20,000 | ||
| Bad debts | 800 | ||
| Business premises | 22,000 | ||
| 4,04,000 | 4,04,000 |
Adjustments:
- The closing stock was ₹ 80,000
- Provide depreciation on plant and machinery @ 20%
- Write off ₹ 800 as further bad debts
- Provide the doubtful debts @ 5% on sundry debtors.
From the following information prepare trading and profit and loss account and balance sheet of Kumar for the year ending 31st December 2017.
| Debit balance | ₹ | Credit balance | ₹ |
| Purchases | 14,500 | Sales | 20,100 |
| Coal and fuel | 600 | Bills payable | 400 |
| Carriage inwards | 750 | Rent received | 2,500 |
| Advertisement | 500 | Creditors | 2,000 |
| Carriage outwards | 400 | Capital | 5,000 |
| Bank | 1,200 | ||
| Furniture | 8,000 | ||
| Debtors | 2,250 | ||
| Bills receivable | 300 | ||
| Stock on 1st January, 2017 | 1,500 | ||
| 30,000 | 30,000 |
Adjustments:
- The closing stock on 31st December 2017 was valued at ₹ 3,900.
- Carriage inwards prepaid ₹ 250
- Rent received in advance ₹ 100
- Manager is entitled to receive commission @ 5% of net profit after providing such commission.
From the following information, prepare trading and profit and loss account and balance sheet in the books of Sangeetha for the year ending 31st March, 2018.
| Particulars | ₹ | Particulars | ₹ |
| Capital | 20,000 | Salaries | 6,600 |
| Bills receivable | 8,000 | Establishment expenses | 4,500 |
| Bills payable | 10,500 | Advertisement | 2,300 |
| Purchases | 75,000 | Furniture | 10,000 |
| Sales | 95,000 | Cash at bank | 3,200 |
| Opening stock | 12,000 | Miscellaneous receipts | 600 |
| Drawings | 4,500 |
Adjustments:
- Stock on 31st March, 2018 ₹ 14,200
- Income tax of Sangeetha paid ₹ 800
- Charge interest on drawings @ 12% p.a.
- Provide managerial remuneration @ 10% of net profit before charging such commission.
