Adjustments (Task 1 & 2)

Question 1

Closing inventory adjustment

Answer 1

DR Inventory (SFP)
CR Cost of Sales (SPL)
!!!For valuation - the lower cost or net realisable value

Question 2

Accrual adjustment

Answer 2

DR Expense (SPL)
CR Accruals (Trade and other payables SFP)

Question 3

Prepayment adjustment

Answer 3

DR Prepayments (Trade and other receivables SFP)
CR Expenses (SPL)

Question 4

Corporation tax adjustment

Answer 4

DR Tax expense (SPL)
CR Tax liability (SFP)

Question 5

Revaluation adjustment

Answer 5

DR PPE (SFP)
CR Revaluation surplus (SFP)

Question 6

Interest accrual adjustment

Answer 6

DR Finance costs (SPL)
CR Trade and other payables (SFP)
!!! May require the calculation of interest amount to accrue