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| 1. |
State the usual adjustments that have to be made when final accounts are prepared. |
| Answer» Thepurpose of making various adjustments is to ensure that the final accounts reveal thetrue profit or loss and the true financial position of the business.The items which usually need adjustment are:1 Closing Stock,2 Outstanding Expenses,3 Outstanding or Accrued Incomes,4 Prepaid Expenses,5 Incomes Received in Advance or Unearned Incomes,6 Depreciation,7 Interest on Capital,8 Interest on loans,9 Bad Debts,10 Provision for Bad Debts,1 1 Provision for Discount on Debtors,12 Provision for Discount on Creditors . | |