Common A/C Adjustments

Question 1

Closing inventory

Answer 1

Dr Inventory (SFP)
Cr cost of sales (P/L)

Question 2

Depreciation charge for the year

Answer 2

Dr Depreciation expense (P/L)

Cr accumulated depreciation (SFP)

Question 3

Accruals

Answer 3

Dr Expenses (P/L)
Cr Accrual (liability) (SFP)

Question 4

Prepayments

Answer 4

Dr prepayments (SFP)
Cr expenses (P/L)

Question 5

Allowance for receivables (increase)

Answer 5

Dr irrecoverable debt expense (P/L)

Cr allowance for receivables (SFP)

Question 6

Allowance for receivables (Decrease)

Answer 6

Dr allowance for receivables (SFP)

Cr irrecoverable debts expense (P/L)

Question 7

Income tax - for the year

Answer 7

Dr tax charge (P/L)

Cr current liabilities (SFP)

Question 8

Adjustment for prior tax year liability (Over provision)

Answer 8

Dr Current Tax provision (SFP)

Cr Tax charge (P/L)

Question 9

Adjustment for prior tax year liability (Under provision)

Answer 9

Dr Tax charge (P/L)

Cr Current Tax provision (SFP)

Question 10

Provisions

Answer 10

Dr Expenses

Cr Provisions