Financial Statements – With Adjustments Account - Financial Statements – With Adjustments

Accrued income is:

Suspense Account appearing in the Trial Balance is shown in the Balance Sheet.

Life Insurance Premium is treated as drawings.

Bank Overdraft is a contingent liability.

Closing Stock given in the Trial Balance is shown only in the Balance Sheet.

Outstanding Wages given in the Trial Balance are transferred to Trading Account.

What is the adjustment entry passed for provision for discount on Debtors?

Following are the Extracts of Trial Balance:

Sundry Debtors (including a B/R for ₹ 5,000 received from Giriraj)
Bad Debts	1,20,000
Provision for Doubtful Debts	3,000	1,800

Giriraj became insolvent and only 40% could be realised from his estate. You are required to make a provision of 5% for doubtful debts. What will be the annount of provision?

Cost of obtaining licence to carry out business is a Capital Expenditure or Revenue Expenditure?

Net profit of a firm before charging manager's commission is ₹ 21,000. If the manager is entitled to 5% commission after charging such commission, calculate the cornmission payable to the manager.

How would you treat goods given away as charity while preparing financial statements of an organisation.

Write notes on the following:

1. Accrued Income.
2. Unearned Income.
3. Provision for Doubtful Debts.

A Company purchased a Machine on 1-4-2008 at a cost of ₹ 3,10,000, estimated residual value ₹ 10,000 with a useful life of 15 years. Depreciation is charged under straight line method till 31-3-2018. After 10 years, an expert recommended that the asset to be used for 10 more years. What is the depreciation for the year 2018-19 under straight line method assuming residual value to remain same?

What is meant by Outstanding Expenses? Give its adjusting entry.

Goods costing ₹ 26,000 were sent to a customer at 20% profit on sale on sale or return basis. Customer returned goods of the selling price of ₹ 7,000. At what amount the remaining goods with the costomer will be shown in the Balance Sheet?

Explain the following with examples:

1. Capital Expenditure
2. Revenue Expenditure
3. Deferred Revenue Expenditure.

Extract of a Trial Balance as at March 31, 2017 is as follows:

Sundry Debtors	₹ 1,02,000
Bad Debts	₹ 1,400
Provision for doubtful debts	₹ 3,400

Additional information: A debtor of ₹ 2,000 could not be recovered. It is decided to maintain Provision for Doubtful Debtors @ 5% on Debtors and Provision for Discount at @ 2%. How these adjustments will be shown in Financial Statements?

Fill in the missing figures in the following:

Fill in the missing figures in the following:

Show the treatment of the following in Final Accounts when given inside the Trial Balance.

1. Prepaid Expenses.
2. Depreciation.
3. Closing Stock.
4. Interest on Capital.
5. Commission received in advance.

Fill in the missing figures in the following: