What are accrued incomes? . What is provision for discount on debtors? III Short answer questions .
What is the need for preparing final accounts? . What is meant by provision for doubtful debts? Why is it created?
. Explain how closing stock is treated in final accounts. . Give the adjusting entries for interest on capital and interest on drawings.
. Explain the accounting treatment of bad debts, provision for doubtful debts and provision for discount on debtors. IV Exercises . Pass adjusting entries for the following: (a) The closing stock was valued at ` , (b) Outstanding salaries ` (c) Insurance prepaid ` (d) ` , was received in advance for commission.
(e) Accrued interest on investments is ` , . Accountancy . For the following adjustments, pass adjusting entries: (a) Outstanding wages ` , . (b) Depreciate machinery by ` , .
(c) Interest on capital @ % (Capital: ` , ) (d) Interest on drawings ` (e) Write off bad debts ` . On preparing final accounts of Suresh, bad debt account has a balance of ` and sundry debtors account has a balance of ` , of which ` , is to be written off as further bad debts. Pass adjusting entry for bad debts. And also show how it would appear in profit and loss account and balance sheet.
( Answer : Profit and loss account: ` , (Dr.); Balance of sundry debtors in balance sheet: ` , ) . The trial balance on March , shows the following: Sundry debtors ` , ; Bad debts ` , It is found that % of sundry debtors is doubtful of recovery and is to be provided for. Pass journal entry for the amount of provision and also show how it would appear in the profit and loss account and balance sheet. ( Answer : Profit and loss account: ` (Dr.); Balance of sundry debtors in balance sheet: ` , ) .
The trial balance of a trader on st December, shows sundry debtors as ` , . Adjustments: