| 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 Educationciass Al a 8 ie a Accounts
debit side a5
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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/cand 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
writtena
| 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 Tzrermentenion 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 LI. 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, rentnd 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