Q1 - Adjustments

Question 1

Sales adjustments

Answer 1

(-) sale or return basis *retail value

Question 2

Opening stock adjustments

Answer 2

NEVER ADJUST

Question 3

Purchases adjustments

Answer 3

(-) cheque for net amount in purchase of DV
(-) destroyed stock
(-) drawings at cost
(+) goods in transit
(+) restocking charge

Question 4

Closing stock adjustments

Answer 4

(+) goods in transit
(-) damaged stock
(+) sale or return basis

Question 5

Salaries and general expenses adjustments

Answer 5

(-) workers used for other job
(+) bill not recorded

Question 6

Patent write off adjustments

Answer 6

Figure in TB + investment income ➗ years written off

Question 7

Suspense adjustments

Answer 7

Discount Allowed - discount account (+) *TABLE
Vat refund in bank account (+)
Mortgage interest too high (+)

Question 8

Depreciation on vans adjustments

Answer 8

Old, new, whole year

Question 9

‘Add operating income’ - what’s included

Answer 9

Rent (if credit)
Discount (if credit)
Reduction in provision for bad debts
Bad debt recovered
Profit on sale of van

(+) investment income
(-) mortgage / debentures