Question
What are Adjustment Entries?
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Answer
In an enterprise there are number of transactions relating to incomes and expenses, which need to be adjusted so that, final accounts give true and fair view of the results. All such items which need to be adjusted when Final Accounts are prepared are called adjustments. Journal entries are passed giving effect to the adjustments. These entries are known as Adjusting Entries.
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The following information is given.
Calculate credit purchases during the year.
| ₹ | |
| Opening creditors | 60,000 |
| Cash paid to creditors | 30,000 |
| Closing creditors | 36,000 |
| Returns Inward | 13,000 |
| Bill matured | 27,000 |
| Bill dishonoured | 8000 |
| Purchases return | 12000 |
| Discount allowed | 5,000 |
Calculate the amount of bills receivable dishonoured from the following information.
| ₹ | |
| Opening balance of bills receivable. | 1,20,000 |
| Bills collected (honoured). | 1,85,000 |
| Bills receivable endorsed. | 22,800 |
| Closing balance of bills receivable. | 50,700 |
| Bills receivable received. | 1,50,000 |
Calculate cost of goods sold from the following:
| ₹ | ₹ | ||
| Opening Stock | 40,000 | Wages & Salaries | 10,000 |
| Net Purchases | 50,000 | Rent Paid | 15,000 |
| Net Sales | 1,90,000 | Closing Stock | 15,000 |
What is meant by Operating Profit?
Prepare Bank Reconciliation Statement from the following:
|
|
₹
|
|
|
(i)
|
Debit balance as per the Cash Book.
|
15,000
|
|
(ii)
|
Cheques deposited but not cleared.
|
1,000
|
|
(iii)
|
Cheques issued but not presented.
|
1,500
|
|
(iv)
|
Bank interest.
|
200
|
Ascertain Gross Profit from the following information :
| (₹) | |
| Opening Stock | 3,00,000 |
| Closing Stock | 2,80,000 |
| Purchases | 8,50,000 |
| Carriage on Purchases | 23,000 |
| Carriage on Sales | 30,000 |
| Office Rent | 58,000 |
| Sales | 14,07,000 |
The Trial Balance of Manish gives the following information:
It is decided to create a Provision for Doubtful Debts @ 10% on debtors and a Provision for Discount @ 2% on debtors. Show how the adjustment will appear in the Final Accounts.
It is decided to create a Provision for Doubtful Debts @ 10% on debtors and a Provision for Discount @ 2% on debtors. Show how the adjustment will appear in the Final Accounts.
Calculate Stock in the beginning:
→| ₹ | |
| Sales | 80,000 |
| Purchases | 60,000 |
| Stock at the end | 8,000 |
| Loss on Cost | $\frac{1}{6}$ |
Following information is given below prepare the statement of profit or loss:
| ₹ | |
| Capital at the end of the year. | 5,00,000 |
| Capital in the beginning of the year. | 7,50,000 |
| Drawings made during the period. | 3,75,000 |
| Additional Capital introduced. | 50,000 |
What is a Credit Note?