Final Account Higher Level Adjustments Flashcards
Where do adjustments always appear
Underneath the trial balance
Where do they appear
They appear twice
- once in trading p + l balance
- once in balance sheet
What is closing stock
Current asset
Depreciation
Reduction in value of fixed assets
Expense due
When you owe an expense at the end of a year
A expense due is…
Current liability
Expense repaid
Expense paid in advance
Expense paid is…..
A current asset
Income due is a…
Current asset
Income repaid is a…
Current liability
What is the basic rule
Add due, subtract prepaid
Current liability
When you owe someone something at the end of the year
Trading account
To show revenue and expenses directly to the trade e.g. Care dealer buys and sells cars.
Profit and loss account
All other income and expenditure
Profit and loss appropriation
This shows how we divide up the net profit (how much money is left to finance the business)
