Stock ` , Furniture ` , Sundry Creditors ` , Opening Entry L.F. Debit ` Credit ` Jan Cash A/c Dr. Stock A/c Dr. Furniture A/c Dr.
To Sundry creditors A/c To Capital A/c (Balance of assets and liabilities brought forward) , , , , , (ii) Closing journal entry At the end of the accounting period, all the ledger accounts relating to purchases, sales, purchases returns, sales returns, stock and other accounts concerning expenses, losses, incomes and gains are closed by transfer to trading and profit and loss account so that financial statements can be prepared. It should be noted that closing entries are made for nominal accounts only. Example: Salaries account ` , . The closing entry as on 31st December, is: Closing Entry L.F.
Debit ` Credit ` December Profit and Loss A/c To Salaries A/c (Salaries A/c transferred to Profit and Loss A/c) , , Accountancy - iii) Adjusting entries After preparing the trial balance, but before preparing the final accounts, if any adjustment is required in the accounts for items or transactions left out, adjusting entries are made. Example Book value of the machinery as on 1st January, ` , , . Rate of depreciation is % p.a. Adjusting entry as on 31st December, is: Adjusting Entry L.F.
Debit ` Credit ` Dec Depreciation A/c ( , , × %) To Machinery A/c (Depreciation written off) , , (iv) Transfer entries Transfer entries are passed in the journal proper for transferring an item entered in one account to another account. For example, transferring net profit of ` , to capital account, the following entry is passed: Transfer Entry L.F. Debit ` Credit ` Profit and Loss A/c Dr. To Capital A/c (Net profit transferred to capital account) , , (v) Rectifying entries Rectifying entries are passed for rectifying errors which are committed in the books of accounts.
Example Purchase of furniture by a stationery dealer for ` , was debited to purchases account. Pass rectifying entry on December , . Rectifying Entry L.F. Debit ` Credit ` Dec