how to prepare final account with adjustment
I mark as brainliest if answer is proper:-)
Answers
Explanation:
The following are the usual adjustments which are to be made at the end of the accounting period:
Closing stock – i) trading a/c credit side and ii) asset side of balance sheet.
Outstanding expenses – i) add in concerned expenses in trading A/c or P & L A/c and ii) liabilities side of balance sheet.
Answer:
Preparation of Final accounts with Adjustments!
The reporting information will not be accurate unless we take into consideration the adjustment entries. The treatment of various common adjustments such as closing stock, outstanding expenses, accrued incomes, prepaid expenses, incomes received in advance, bad debts, reserve for bad and doubtful debts, reserve for discount on debtors, reserve for discount on creditors, interest on capital, interest on drawings, depreciation, etc., the knowledge of which should be made use of while preparing final accounts.
There are some adjustments which are rare but special in their character and treatment. Let us consider such adjustments here.