Practice Important Adjustments In Final Accounts (2.5.4)

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8 questions

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4 cards from this section. Quick, good the night before a test.
Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
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Quiz
2 questions · about 1 min · pass mark 70%. Hints available.
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6 sample questions

Question 1.
Define depreciation in your own words.
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Think about how value decreases over time.
Question 2.
What are outstanding expenses?
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These are expenses looming over the accounts.
3Question 3.
What is the purpose of depreciation in accounting?
- To reduce asset value
- To increase liability
- To inflate profits
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Think about asset treatment in accounting.
4Question 4.
True or False: Prepaid expenses are recorded as liabilities.
- True
- False
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Reflect on when expenses are recognized.
Question 5.
A company has made provisions for taxes worth ₹20,000, accrued income of ₹8,000, and outstanding expenses of ₹5,000. Prepare the relevant journal entries.
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Consider how each item would appear in double-entry bookkeeping.
Question 6.
Discuss the potential impact on a company's final accounts if outstanding expenses are not recorded. Provide an example.
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Reflect on how accurate financial health depends on proper recording.

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