Adjustment entry
This query is : Resolved
13 October 2012
Trail balance showing Salary A/c 30000,outstanding salary 5000 and additional information is given advance salary is 7000.
what would be the adjustment entry for preparing adjusted trail balance?
what would be the adjustment entry for preparing adjusted trail balance?
13 October 2012
Is you asking how much salary amount debit to P&L a/c for such year? Is it correct the answer is as follows.
Salary in P&L A/c = Salary paid(i.e trail balance showing amount) + Salary payable(i.e Out standing amount) - Advance salary paid.
Thus Salary in P&L A/c = 30000+5000-7000 = 28000.
Why such adjustments required. according to the accrual basis of accounting system these adjustments required because to satisfy the accrual basis of accounting concept. According to this concept income/expenditure should be credit/debit to the P&L a/c(i.e recognaise) in the year of such actual liability arises.
Thus for the year salaries liability arised Rs.5000 but not paid so should be debited to P&L in such year and show as liability. As well as salaries relating to future years of Rs.7000 paid during the year but actually salaries liability doesn't arised in such year. So should be deduct from P&L a/c and show as asset.
OM SAI SRI SAI JAI JAI SAI
Salary in P&L A/c = Salary paid(i.e trail balance showing amount) + Salary payable(i.e Out standing amount) - Advance salary paid.
Thus Salary in P&L A/c = 30000+5000-7000 = 28000.
Why such adjustments required. according to the accrual basis of accounting system these adjustments required because to satisfy the accrual basis of accounting concept. According to this concept income/expenditure should be credit/debit to the P&L a/c(i.e recognaise) in the year of such actual liability arises.
Thus for the year salaries liability arised Rs.5000 but not paid so should be debited to P&L in such year and show as liability. As well as salaries relating to future years of Rs.7000 paid during the year but actually salaries liability doesn't arised in such year. So should be deduct from P&L a/c and show as asset.
OM SAI SRI SAI JAI JAI SAI
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- House Property Reporting in ITR
- Refund Annexure-B
- TDS Claim year
- Internship/Academic shown in Salary Pay Slip of a Doctor
- Refund of 20%pre-deposit paid for stay application
- Rent lease agreement
- Nomination of Bank for refund in itr 2
- Section 56(2) of the Income tax Act 1961 , Gift to relative .
- TDS Challan Code
- Liable to deduct tds and 44ADA
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
