ACCOUNTING ADJUSTMENTS Flashcards
explain why adjustments are made to financial statements
where do accruals appear on the Balance Sheet
explain accounting concepts
that underpin the need for
adjustments;
Prudence, accrual, consistency.
Where do and prepayments appear on the Balance Sheet
Distinguish between bad and doubtful debts
Explain the nature of depreciation;
explain why adjustments are
made to financial statements;
The reasons for adjustments; application of
the matching/accruals concept
Causes of depreciation
Factors to be considered when calculating
depreciation
explain why adjustments are
made to financial statements;
The reasons for adjustments; application of
the matching/accruals concept
explain the reasons for bad debts;
What is a bad and doubtful debt
What is the provision for doubtful debts
indicate the treatment of bad and
doubtful debts in the Income
Statement and Balance Sheet
Accounting entries in the Income Statement
and Balance Sheet.
Add accurals subtract prepayments
Accrued expenses are expenses owing we didn’t pay (current liability)
Prepaid expenses are expenses paid in advance we have pay in advance (current asset)
Accrued revenues are outstanding revenues( They didn’t pay) (Current assets)
Prepaid revenues are payments received in advance ( they paid in adavance) (current liability)
Accrued expenses are expenses owing we didn’t pay (current liability)
Prepaid expenses are expenses paid in advance we have pay in advance (current asset)
Accrued revenues are outstanding revenues( They didn’t pay) (Current assets)
Prepaid revenues are payments received in advance ( they paid in advance) (current liability)
Nbv
Net book value = cost - accumulated depreciation
Nbv
Nbv
