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Journal Entries $type=three$count=6$author=hide$comment=hide$label=hide$date=hide$show=home$s=0

Balance Sheet $type=three$count=6$author=hide$comment=hide$label=hide$date=hide$show=home$s=0

Adjustments of Final accounts - full detail in table form

There are many adjustment because earlier we have not passed any journal entry , so at the time of making final account we have to adjust them .
Name of items
Adjustment entry
Effect on trading and profit and loss account
Effect on balance sheet
1. Closing stock
Closing stock account dr. xxx
To trading account xxx
Closing stock will write in the credit side of trading account
It will show as asset in the final account
2. outstanding expenses or expenses payable or expenses due but not paid
Expenses account dr. xxx
To outstanding exp. xxx
Outstanding expenses will add in expenses . if it is direct it will go to trading account’s debit side , if it is indirect nature then it will go to the debit side of profit and loss account
It will be the current liability so it will go to the liability side of balance sheet.
3. advance expenses
Advance expenses a/c dr. xxx
To expenses account xxx
It will deduct from respective expenses paid .
It will be the current asset so it will go to assets side of balance sheet
4. income receivable
Outstanding income account dr. xxx
To income account xxx
It will add in the income and go to credit side of profit and loss account
It will show as asset in the assets side of balance sheet
5. income received in advance
Income account dr. xxx
To advance income account xxx
It will deduct from the income received
It will shown as liability in the liabilities side of balance sheet
6 Goods use for personal use
Drawing account dr. xxx
To purchase account
It will deduct from purchase in the debit side of trading account
= purchase –drawing in goods
It will deduct from capital in the liabilities side of balance sheet
=capital- drawing in goods
7. Destroyed of goods
loss by fire or accident account Dr. xxx
To trading
If there is no insurance
It will also go to profit and loss account
Profit and loss account dr. xxx
To loss by fire / accident
It will shown in credit side of trading account
And also in profit and loss account’s debit side
It will not go to balance sheet
8. Depreciation
Depreciation account dr. xxx
To respective asset account xxxx
It will go to the debit side of profit and loss account
It will deduct from fixed asset . Because it decrease the value of asset
=fixed asset - depreciation
9. provisional for doubtful debts
If you have make any provision for doubt ful debts the its journal entry will passed
Provision for doubtful debt account dr. xxx
To Bad debts account xxx
( New bad debts which is not shown in trial balance will transfer to provision for doubtful debt account )
Net value of provision for doubtful debt account transfer to profit and loss account’s debit side
=total bad debt + closing balance or provision of doubtful debt or this year provision - opening balance of provision for doubtful debts
Deduct from debtor
= debtor – new bad debts – this year provision or closing balance of provision for bad debts
10. Commission to manager
Commission account dr. xxx
To outstanding commission
It will shown in the debit side of profit and loss account as o/s commission to manager
If it charge on the amount after charging such commission then we will calculate
= profit before commission X Rate/ 100+rate
It will shown as liability

Comments

: 19
  1. i'm very thankful to you.
    I didn't attend my period of adjustments so i had no concept about these strange things.
    These looked like an evil face before.
    Now i've an evil face for adjustments.

    ReplyDelete
  2. thanks Bro.

    its is really simple way to understand and for remember also

    ReplyDelete
  3. thanks for providing us these information

    ReplyDelete
  4. in adjustment entries there is a point -
    goods of Rs.25000/- is included in stock but its bill is not received till the date and has not made any entry in any book.

    please suggest its entries in the books.

    ReplyDelete
  5. vryy helpfull :) ty

    ReplyDelete
  6. Bundle of thanx Respectable Sir

    ReplyDelete
  7. it is very useful if it is power point it very very useful

    ReplyDelete
  8. As we write provision for bad nd doubtful debts on credit side of profit and loss account.....now tell me the treatment of provision for depreciation.....where i will go...plz fast..reply...

    ReplyDelete
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Accounting Education: Adjustments of Final accounts - full detail in table form
Adjustments of Final accounts - full detail in table form
Accounting Education
https://www.svtuition.org/2008/09/adjustments-of-final-accounts-full.html
https://www.svtuition.org/
https://www.svtuition.org/
https://www.svtuition.org/2008/09/adjustments-of-final-accounts-full.html
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