Balance Day Adjustments

Question 1

Depreciation: Straight Line

Answer 1

Historical Cost x Depreciation rate %

Question 2

Depreciation: Diminishing Value

Answer 2

(Historical Cost - Accumulated depreciation) x Diminishing value %

Question 3

Bad Debts

Answer 3

Dr Bad debts xxx
Dr GST xxx
Cr Accounts Receivable xxx

Question 4

Doubtful Debts

Answer 4

Dr Doubtful debts xxx
Cr Allowance for doubtful debts xxx

Question 5

Accounts Payable (increase)

Answer 5

Dr Expense xxx
Dr GST xxx
Cr Accounts Payable xxx

Question 6

Accounts Payable (decrease)

Answer 6

Dr Accounts Payable xxx
Cr Expense xxx
Cr GST xxx

Question 7

Accounts Receivable (increase)

Answer 7

Dr Accounts Receivable xxx
Cr GST xxx
Cr Income xxx

Question 8

Accounts Receivable (decrease)

Answer 8

Dr Income xxx
Dr GST xxx
Cr Accounts Receivable xxx

Question 9

Accrued Income

Answer 9

Dr Accrued Income xxx
Cr Income xxx

Question 10

Accrued Expense

Answer 10

Dr Expense xxx
Cr Accrued Expense xxx

Question 11

Prepayment

Answer 11

Dr Prepayment xxx
Cr Expense paid xxx

Question 12

Income in advance

Answer 12

Dr Income xxx
Cr Income in advance xxx

Question 13

Revaluation (Land)

Answer 13

Dr Land xxx
Cr Land revaluation surplus xxx

Question 14

Revaluation (Buildings)

Answer 14

1. Close off accumulated depreciation
   Dr Accumulated depreciation - buildings
   Cr Buildings xxx
2. Increase buildings value
   Dr Buildings xxx
   Cr Buildings revaluation surplus xxx

Question 15

Revaluation of Financial Assets (increase)

Answer 15

Dr Financial Assets - (Company name) xxx
Cr Increase in fair value of financial assets xxx

Question 16

Revaluation of Financial Assets (decrease)

Answer 16

Dr Decrease in fair value of financial assets xxx
Cr Financial Assets - (Company name) xxx

Question 17

Tax payable

Answer 17

Actual income tax expense - provisional tax / tax paid
= positive number, we owe them

Question 18

Inventory Adjustment (increase)

Answer 18

Dr Inventory xxx
Cr Cost of Goods Sold xxx

Question 19

Inventory Adjustment (decrease)

Answer 19

Dr Cost of Goods Sold xxx
Cr Inventory xxx

Question 20

Tax receivable

Answer 20

Actual income tax expense - provisional tax / tax paid
= negative number, they owe us money