Question

Net profit of a firm before the following adjustment was `46,000, The rent

outstanding is `8,000 and prepaid salary is `12,000 then net profit after above

adjustment will be​

Answer 1

Answer:

Net profit before adjustment = 46000

(-) outstanding rent = 8000

{+) prepaid salary = 12000

Net profit after adjustment = 50000

Explanation:

according to matching concept outstanding expenses related to current profit will add to the profit and prepaid expenses are not related to current profit are subtract from profit