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Closing Adjustments Notes

LPC Law Notes > Accounts Notes

This is an extract of our Closing Adjustments document, which we sell as part of our Accounts Notes collection written by the top tier of Cambridge And Oxilp And College Of Law students.

The following is a more accessble plain text extract of the PDF sample above, taken from our Accounts Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

Core Module: Business Accounts

Business Accounts Closing Adjustments Trading Account:

1. Closing stock adjustment Profit & Loss / Balance Sheet adjustments:

1. Accrual: expense not yet received by business

2. Pre-payment: advance payment for next accounting period

3. Provision for depreciation

4. Bad debts: debt of customer is written off by business

5. Provision for bad / doubtful debts: estimate for current debtors (expressed as
% of total debtors)

6. Closing stock (balance sheet only) ENTER TWICE! BUT: Bad debt: If already entered into the trial balance, enter ONLY Expense in Profit and Loss Account. Provision for bad debt: If already entered into trial balance, enter ONLY as Trade debtors in balance sheet.

Trading, Profit and Loss Account AND CLOSING ADJUSTMENTS
PS
Sales (- Returns inwards) LESS cost of sales Opening Stock at (date) Add: purchases (- returns outwards) Less: closing stock Plus: cost of sales Gross Profit (+ discount received) LESS Expenses Rent Repairs Wages Insurance Electricity
- Prepayments
+ Bad Debts written off
+Provision for bad debt or Doubtful Debt
+ Accruals
+ Depreciation (of x,y,x)
+ expense

1 PS

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