Explain treatment of the following adjustments in the financial statements:
(a)Accrued income (b)Unearned income (c) Unexpired insurance (d) Manager’s Commission
irrelevant answers will be reported
Answers
Answer:
Accured income will be recorded on assets side of balance sheet
unearned income will be recorded on liability side
Answer:
a) Accrued income is taken into consideration in financial statdments and are added to their accounts.
b)Unearned income is subtracted from the accounts and are not included in financial statements.
c)It is taken into consideration and goes on assets side of balance sheet in financial statements.
d)It comes in P&L dr. side in financial statements and second effect on liability side in Balance sheet as manager's commision as shown payable.
Explanation:
a) matching concept
b)matching concept
c)It is still operative and therefore is our asset at current situation
d)well that's It's treatment as we are paying commision so it is our expense as a result we take it on p&l dr. side and as dr. effect is given cr. effect and second effect is given as showing it as a liabilty.
Hope you understood