Students can go through AP Inter 1st Year Accounts Notes 12th Lesson Final Accounts with Adjustments will help students in revising the entire concepts quickly.
Final Accounts with Adjustments Class 11 Notes AP Inter 1st Year Accounts 12th Lesson
→ To find out net profit and true financial position, all expenses relating to current year whether actually paid or not, and all incomes received or to be received should be considered.
→ Some of the incomes and expenses relating to the next year, but received and paid in the current year should not be included in the current year amounts.
→ The amount to be adjusted to the concerned items is called adjustment.
Types of Adjustments:
- Adjustments related to closing Stock.
- Adjustments related to expenses
- Outstanding expenses
- Prepaid expenses
- Adjustments related to incomes
- Incomes receivable
- Incomes received in advance
- Adjustments related to depreciation
- Depreciation on fixed assets
- Adjustments relating to debtors.
- Bad debts
- Reserve for bad and doubtful debts.
- Adjustments relating to Capital Account
- Interest on Capital,
- Interest on Drawings.