| On | Total ‘ 15,4100 | 15.41.000 Oss Account fe h, 2019 and Bate her 19 was Rs. Depr Sundry £ 4) Th TABLE OF ADJUSTMENTS (Appearing Outside the Trial Balance) ~ Adjusting Entry Adjustmentin | Adjustmentin | Adjustment in @) (2) Trading A/c (3) P&L A/c (4) Balance Sheet Adjustments 1. Closing Stock Closing Stock A/c ..Dr | Show on the To Trading A, credit side Shreyas Khonde VD Educationciass Al a 8 ie a Accounts debit side a5 Advertisement Expense Distributed [A/c Dr among staff] To Purchase A/e i members for| To Input CGST A/c Sta'¥ Welfare | To Input SGTS A/c ods is shown on the credit side of Trading Account or Or deducted — frem = — To Input IGST A/c the purchases ———_ 3. Drawing of Drawings A/c .Dr | Value of such x | Value of suc Goods for| To Purchases A/c goods deducted goods will be Personal Use | To Input CGST A/c from purchases deducted = from To Input SGST A/c capital on the | Or iabilities side. | : To Input IGST A/c oi | , 14. Abnormal or | Loss by Accident A/c * from the | | Accidental Dr ncemned asset | | Losses To Particular Asset A/c | 1) Loss of] Tolnput CGST A/c | Assets To Input SGST A/c | Or To Input IGST A/c on the | Show on the | The of | Loss by Accident A/c .Dr | Show To Trading A/cand Loss A/c Pr on Debts A/c Loss A/c ...Dr sion for Debtors / ts back 10. Manager's Show on the|Show an the Comm Manager's debit side liabilities Pf Commission Payable A/c writtena | Unearned | B j—Income | } | 6 Depreciation | Depreciation A/c _...Dr ¥ |Show on the | Deduct from the To Assets A/c debit side cone asuer se a | on the assets side 7. Bad Debts Bad Debts A/c x Write on the | Deduct ror | To Debtors A/e debit side of the | Debtors on the | Profit and Loss o Account or | Provision for Doubtful Debts Account i show on the | Deduct | 8. Provision for | Profitand Loss A/c ...Dr x j Doubtful To Provision for debit side debtors on the Debts Doubtful Debts A/c assets side | 9. Provision for | Profitand Loss A/c ...Dr x Show on the | Deduct Discount on To Provision _for debit side debters } | Debtors Discount on Debtors A/c assets side ; | i Exce Provision for Doubtful x Show on the | x | Provision for | Debts A/c Ase credit side Doubtful To Profit and Loss A/c ] . Debts written |Accounts Z. Outstanding Expenses _| Current Asset Add to| Show on the respective | liabilities side as expense on the | a Current debit side | Liability. Respective Expenses A/c «Dr Input CGST A/c ...Dr Input SGST A/c ...Dr Add to the respective expense on the debit side | Or | InputIGST A/c ...Dr To Outstanding Expense A/c 3. Prepaid or| Prepaid or Unexpired | Deduct from the | Deduct from | Show on the Unexpired Expense A/c soDF concerned respective assets side as a Expenses To Respective | expense on the | expense on the | Current Asset. Expense A/c debit side debit side 4. Accrued or | Accrued Income A/c Add to| Show on the Outstanding Dr respective assets side as a Income To Respective Income income on the Current Assets credit side : +Adjusted Purchases and Closi have been adjusted in purchase: Journal entries as follows: ing Stock: Adjusted purchases means that Opening stock and Closing Stock S. Opening Stock and Closing Stock are adjusted in purchases by passing the Purchases A/c waD Tt To Opening Stock A/c — Closing Stock A/c we Dhe To Purchases A/c As a result Adjusted Purchases Account is shown in the Trial Balance along with the Closing Stock. It should be noted that when Closing Stock is given in the Trial Balance, it means that both opening and closing stocks have been adjusted in the purchases, And when adjusted purchases is shown in the Trial Balance, opening stock will not be shown in the Trial Balance. Instead, adjusted purchases and closing stock will be shown. Adjusted Purchase = Net Purchases + Opening Stock - Closing Stock. Adjusted purchases are shown on the debit side of the Trading Account while Closing Stock is shown on the assets side of the Balance Sheet under Current Assets. Dr. TRADING ACCOUNT Cr, BALANCE SHEET | Particulars Particulars Liabilities Tzrermentenion Payable A/c 8 Me outstanding commission provided along with GST) If the Outstandin passed. In effect, a are shown in the Trial Balance, it means that the adjusting entry is already such a case, Outstandi nding expenses are already included in the expenses showm im the Trial Balance. In : nding Expenses are shown only in the Balance Sheet as current liability. 3. PREPAID OR UNEXPIRED EXPENSES OR EXPENSES PAID IN ADVANCE In some cases, the benefit of expenses incurred and also paid relates to next accounting year. Such part of s. Common examples of such expenses the expenses is known as prepaid expenses or unexpired expense: : interest paid in advance, etc. In such cases, unexpired part of the are prepaid rent, prepaid insurance and , expenses in the amount of expenses under that head is adjusted and prepaid expenses are shown as an asset in the Balance Sheet. =, It should be noted that when amount is transferred from Expenses Account, GST paid is not transferred, i.e., only the amount of expense is transferred to Prepaid Expense Account, “ and ) = a ir gata a LI. Unexpired part of the Insurance premium ( b seurenes premium in the Profit and Loss Account. + Prepaid Insurance Premium is shown on the assets s Current Assets. one principle applies to all expenses incurred during the year but whose b consumed, i.e., exhausted in the next accounting year. In case, Prepaid Expenses Account is shown in the Trial Balance, it means t passed. Therefore, Prepaid Expenses Account is shown only in the Balance Sheet as Cur have been earned during the accounting per eriod. Such incomes are known as Outsta ples of such incomes are ce t of Accounting, total income of the period, both nts otherwise the profit and assets wil remain ‘ mas receivable, rentnd Rent but not on interest. Therefore, t Note: GST (CGST and § is levi ission a igor ( end Sie) of 1687) is Jevied on Comminiee vied. Accordingly, Output GST (CGST ang Commission and/or Rent is due CGST and SGST or IGST will be le SGST or IGST) Account will be credited. Where Accrued Income is given in the Trial Balance, it means its adjustment entry is already passed. In such a case, the Accrued Income is shown only in the Balance Sheet as current asset. 5. INCOME RECEIVED IN ADVANCE OR UNEARNED INCOME Unearned Income means an income that has not been earned but is received in advance. Sometimes an amount is received during a year in respect of an income that relates partially or fully to the next year. For example, rent for the month of April, 2019 is received in March, 2019. It is an income for the year ending on 31* March, 2020 but is received in the current year, it is Unearned income or Income received in advance. The Journal entry at the time of receiving income (Say, Rent) is as follows: Cash/Bank A/c To Income (Say, Rent Received) f fo Output A/c Dr