Practice Adjustments In Final Accounts (17.6) - Final Accounts (Trading, Profit & Loss Account and Balance Sheet)

Practice: Adjustments in Final Accounts

Lesson 17.6Final Accounts (Trading, Profit & Loss Account and Balance Sheet)

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10 questions

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6 sample questions

Question 1.
What are outstanding expenses?
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Think about expenses that are due but not yet paid.
Question 2.
Define prepaid expenses.
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Consider payments made in advance.
3Question 3.
What are outstanding expenses?
- Expenses already recorded
- Expenses incurred but not recorded
- Expenses that are advance payments
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Think about what expenses have not hit the records yet.
4Question 4.
True or false: Prepaid expenses are considered as liabilities.
- True
- False
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Consider what kind of account they fall under.
Question 5.
You are reviewing your company's financial records and find an accrued expense of ₹8,000 that was not recorded this period. How would this affect the Profit & Loss account and the Balance Sheet?
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Think about how this expense reflects on overall earnings.
Question 6.
A business owner neglected to adjust for ₹3,000 in bad debts. What impact does this have on the financial statements, and how would you rectify it?
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Consider what happens when expected income is inaccurately reported.

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