Year end adjustments

Asume year end to be 28 February.

Insurance for March 2020 has been paid in advance.

TB - Insurance = R26 000

What is the adjustment in the fin statements?

• Debit Prepaid expense R2 000 ; Credit Insurance R2 000

• Debit Insurance R2 000 ; Credit Prepaid expense R2 000

• Debit Prepaid expense R26 000 ; Credit Insurance R26 000

• Debit Insurance R26 000 ; Credit Prepaid expense R26 000

Asume year end to be 28 February.

The following accounts for February 2013 have not yet been paid:

 Telephone ,R650

 Electricity ,R400

What entry is not an adjustment in the fin statements?

• Debit Telephone R650

• Debit Electricity R400

• Credit Accrued income R1 050

• Credit Accrued expense R1 050

Asume year end to be 28 February.

A debtor N Diab returned the goods, the selling price was R5 000 and the markup was

60% on cost.

What entry will appear in the Income statement?

• Debit Cost of sales R3 125 ; Credit Trading Stock R3 125

• Debit Debtors Control R5 000 ; Credit Cost of sales R3 125

• Debit Debtors allowances R5 000 ; Credit Cost of Sales R3 125

• Debit Sales R5 000 ; Credit Cost of Sales R5 000

Asume year end to be 28 February.

A debtor N Diab returned the goods, the selling price was R5 000 and the markup was

60% on cost.

What entry will appear in the Balance sheet?

• Debit Trading Stock R3 125 ; Credit Debtors control R5 000

• Debit Debtors Control R5 000 ; Credit Trading stock R3 125

• Debit Debtors allowances R5 000 ; Credit Cost of Sales R3 125

• Debit Debtors Control R5 000 ; Credit Trading stock R5 000

Asume year end to be 28 February.

The bookkeeper omitted the following amounts on the bank statement :

 Bank charges ,1 200

 Interest on favourable current account balance ,R300

What entry will appear in the Balance sheet?

• Increase Bank overdraft with R1200

• Increase Bank overdraft with R1500

• Decrease Bank overdraft with R1500

• Decrease Bank overdraft with R300

Asume year end to be 28 February.

A debtor was declared insolvent. Received 35 cents in the rand and bank R700 received from him. Write the balance of as irrecoverable

What is the entry in the income statement?

• Debit bad debts R245

• Debit bad debts R700

• Debit bad debts R1300

• Credit bad debts R700