. What is meant by provision for discount on debtors? . Give the journal entries for the following adjustments : (a) Outstanding salary Rs.
, . (b) Rent unpaid for one month at Rs. , per annum. (c) Insurance prepaid for a quarter at Rs.
, per annum. (d) Purchase of furniture costing Rs. , entered in the purchases book. Long Answers .
What are adjusting entries? Why are they necessary for preparing final accounts? . What is meant by provision for doubtful debts?
How are the relevant accounts prepared and what journal entries are recorded in final accounts? How is the amount for provision for doubtful debts calculated? . Show the treatment of prepaid expenses depreciation, closing stock at the time of preparation of final accounts when: (a) When given inside the trial balance?
(b) When given outside the trial balance? Numerical Questions . Prepare a trading and profit and loss account for the year ending March , . from the balances extracted of M/s Rahul Sons.
Also prepare a balance sheet at the end of the year. Stock , , , Purchases return Salary , Discount received , , Provision for doubtful debts , Sales return , , Sundry Debtors , Bills payable , Discount allowed Commission received Insurance , Rent Rent Rates and Taxes , Loan , Fixtures and fittings Trade expenses Drawings , Repair and renewals , Travelling expenses , Postage Telegram expenses Legal fees Bills receivable , Building , , , , , , Adjustments . Commission received in advance Rs. , .
. Rent receivable Rs. , . .
Salary outstanding Rs. , and insurance prepaid Rs. . .
Further bad debts Rs. , and provision for doubtful debts @ % on debtors and discount on debtors @ %. . Closing stock Rs.
, . . Depreciation on building @ % p.a. ( Ans : Gross loss Rs.
, ; Net loss Rs. , ; Total balance sheet Rs. , , ) . Prepare a trading and profit and loss account of M/s Green Club Ltd.
for the year ending March , . from the following figures taken from his trial balance : , , , , ,