Question

prepare the final accounts of Mr.krishna Nair​

Answer 1

Answer:

Explanation:

Adjustment 1 : Closing stock is on outside of Tb so it should have appear in both Cr side of trading account and asset side of balance sheet.

Adjustment 2:Depreciation Is an indirect expense so it should appear in de Side of profit And loss and It must deduct from the concerned Assets.the cvalue of depreciation is 10%*Asset value and land building = 2.5% asset value

Adjustment no 3: Wages should have include in debit side of trading account and if it is outstanding then should add in Liability side of balance sheet.

Adjustment No4: prepaid expense should add as Cr side of P&L and show as asset in B/s.

Adjustment 5:And 5%for debtors is shows as Debit side P&L .2% discount deduct from the Debtors in B/S

and all the direct expenses relating to trading,production ,manufacture should show as debit side trading A/C and direct expenses relating distribution, adminitration should show as debit side P&L A/C and vice versa.And asset show as in balance sheet and Libilities,sharecapital,equity,share premium,retyained earning ,o/s expenses ,prepaid income show as in Liability side of B/s