Page 162 - Account 10
P. 162
Dr. P & L A/c Cr.
Particulars Amount Particulars Amount
To Old bad debt 1,000
Add: New bad debt 2,000
Add: New provision 900
3,900
Less : Old provision 1.500 2,400
Balance Sheet
Capital/Liabilities Amount Assets Amount
Debtors 20,000
Less: New b/d 2.000
18,000
Less: New provision 900 17,100
Effects of Adjustments
S.N. Transactions Effect on final accounts Treatment in final accounts
1. Closing stock Trading account Credit
Balance sheet Assets
2. Outstanding expenses Trading or P/L account Debit (Add to the concerned item)
Balance sheet Liabilities
3. Prepaid expenses Trading or P/L account Debit (Deduct from concerned item)
Balance sheet Assets
4. Accrued incomes P/L account Credit (Add to the concerned item)
Balance sheet Assets
5. Advance incomes P/L account Credit (Deduct from concerned item)
Balance sheet Liabilities
6. Depreciation P/L account Debit
Balance sheet Assets
7. Bad debts/Provision for P/L account Debit
bad debts Balance sheet Assets (Deduct from debtors)
8. Interest on capital P/L account Debit
Balance sheet Liabilities (Add to the capital)
9. Interest on loan P/L account Debit
Balance sheet Liabilities
162 Aakar’s Office Practice and Accountancy - 10 Final Accounts 163
