formula for hidden adjustment on advertisement in accountancy
Answers
Answer:
Hidden adjustments are also called Implied adjustments and this question actually falls under the sub-category Profit & Loss A/c. Let us see how these adjustments are done:
Trial Balance as on 31.12.2013
Dr. Cr.
9% Fixed Deposit with SBI 100000 12% Loan from M/s Ram & Co. 200000
(Fixed Deposit done on 1.4.2013) (loan obtained on 1.1.2013)
Interest 6000 Interest Received 2250
On debit side 9% fd is given. This is an asset. Interest on this fd from 1.4.13 to 31.12.13 comes to Rs.6750. Out of this only Rs.2250 has been received as shown on the credit side of TB (this being an income is a credit balance). This means Rs.4500 has accrued but not received. Hence we will pass an adjustment entry:
Interest Accrued A/c Dr. 4500 (This will be shown in Balance Sheet added to FD A/c)