4. The following balances were extracted from the books of Avika Enterprises

. The following balances were extracted from the books of Avika Enterprises on March , . Particulars Dr. (Rs.) Cr. (Rs.) , , Cash , , Bank , Plant Freehold Land Heating and Lighting Bills Receivables , Return Inwards Salaries , , , Stock (as on . . ) Printing Bills Payable , Taxes Discount Received Commission (Dr.) Trucks , , , Drawings Returns Outward , , , , Key Terms Introduced in the Chapter • Outstanding /Accrued expenses • Prepaid/Unexpired expenses • Accrued Incomes • Income received in advance • Depreciation • Bad Debts • Provision for doubtful debts • Provision for discount on debtors • Managers Commission • Interest on Capital Summary with Reference to Learning Objectives Need for adjustments : For the preparation of financial statements, it is necessary that all the adjustments arising out of the accrual basis of accounting are made at the end of the accounting period. Another important consideration in the preparation of final accounts with adjustments, is the distinction between capital and revenue items. Entries which are recorded to give effect to these adjustments are known as adjusting entries. Outstanding expenses : At the end of the accounting period sometimes a business enterprises is left with some unpaid expenses due to one reason or another. Such expenses are termed as outstanding expenses.