ACCOUNTING ADJUSTMENTS

Question 1

explain why adjustments are made to financial statements

Question 2

where do accruals appear on the Balance Sheet

Question 3

explain accounting concepts
that underpin the need for
adjustments;

Answer 3

Prudence, accrual, consistency.

Question 4

Where do and prepayments appear on the Balance Sheet

Question 5

Distinguish between bad and doubtful debts

Question 6

Explain the nature of depreciation;

Question 7

explain why adjustments are
made to financial statements;

Answer 7

The reasons for adjustments; application of
the matching/accruals concept

Question 8

Causes of depreciation

Question 9

Factors to be considered when calculating
depreciation

Question 10

explain why adjustments are
made to financial statements;

Answer 10

The reasons for adjustments; application of
the matching/accruals concept

Question 11

explain the reasons for bad debts;

Question 12

What is a bad and doubtful debt

Question 13

What is the provision for doubtful debts

Question 14

indicate the treatment of bad and
doubtful debts in the Income
Statement and Balance Sheet

Answer 14

Accounting entries in the Income Statement
and Balance Sheet.

Question 15

Add accurals subtract prepayments

Answer 16

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)

Answer 17

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)

Question 18

Nbv

Answer 18

Net book value = cost - accumulated depreciation

Question 19

Nbv

Question 20

Nbv