Question
Why is it necessary to pass the Adjustment Entries?
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Answer
Accrual Concept is the fundamental accounting concept and required that all expenses, whether paid or not and all incomes and gains whether recevied or not, should be accounted to ascertain correct profit or loss, assets and liabilities. They are recorded through the adjustment entries.
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Similar questions
What are Adjustment Entries?
From the following Statemant of Profit or Loss, determine the missing information:
From the following balances taken from the books of Simmi and Vimmi Ltd. for the year ending March 31, 2017, calculate the gross profit.
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₹
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Closing stock
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2,50,000
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Net sales during the year.
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40,00,000
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Net purchases during the year.
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15,00,000
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Opening stock.
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15,00,000
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Direct expenses.
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80,000
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Rectify the following errors:
- Sales to Vinod of ₹ 143 posted to his account as ₹ 134.
- Sales to Vinod of ₹ 143 debited to his account as ₹ 134.
- Sales to Vinod of ₹ 143 credited to his account as ₹ 134.
Calculate operating profit from the following:
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₹
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Net Profit
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5,00,000
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Dividend Received
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6,000
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Loss on sale of Furniture
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12,000
|
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Loss by Fire
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50,000
|
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Salaries
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1,20,000
|
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Interest on Loan from Bank
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10,000
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Rent Received
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24,000
|
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Donation
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5,100
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Mohan maintains books on Single Entry System. He gives you the following information:
You are required to calculate the Profit or Loss made by Mohan.
| ₹ | |
| Capital on 1st April, 2018 | 15,200 |
| Capital on 31st March, 2019 | 16,900 |
| Drawings made during the year | 4,800 |
| Capital introduced on 1st August, 2018 | 2,000 |
Write Short Notes on:
Software.
Software.
Write the various Assets in order of liquidity in a Balance Sheet.
What is meant by Prepaid Expenses? How are they adjusted in the Final Accounts?
List the assets in order of permanence:
Sundry Debtors, Stock, Land and Building, Plant and Machinery, Furniture, Investments, Cash in Hand and Cash at Bank.
Sundry Debtors, Stock, Land and Building, Plant and Machinery, Furniture, Investments, Cash in Hand and Cash at Bank.