Accountancy Adjustments for Manufacturing Companies

The video tutorial covers various adjustments in financial statements, focusing on depreciation, goods lost, free samples, interest, sales errors, carriage, repairs, and unrecorded transactions. It explains the journal entries and dual effects of these adjustments on manufacturing accounts, trading accounts, profit and loss accounts, and balance sheets. The tutorial also highlights hidden adjustments in trial balances and provides tips for solving related problems.

What is the dual effect of depreciation on factory assets in financial statements?

• Credit side of trading account and add to assets in balance sheet

• Debit side of manufacturing account and deduct from assets in balance sheet

• Debit side of profit and loss account and add to assets in balance sheet

• Credit side of profit and loss account and deduct from liabilities

How should goods lost by fire be recorded if they are uninsured?

• Debit trading account and credit insurance claim account

• Debit profit and loss account and credit goods lost by fire account

• Debit goods lost by fire account and credit trading account

• Debit insurance claim account and credit trading account

When goods are distributed as free samples, what is the correct journal entry?

• Debit profit and loss account and credit advertisement account

• Debit advertisement account and credit goods distributed as free samples account

• Debit sales account and credit advertisement account

• Debit goods distributed as free samples account and credit sales account

What is the effect of interest accrued on investments in the financial statements?

• Credit side of profit and loss account and add to investments

• Credit side of profit and loss account and deduct from liabilities

• Debit side of profit and loss account and deduct from investments

• Debit side of profit and loss account and add to liabilities

How should interest accrued on loans taken be recorded if not yet paid?

• Debit interest account and credit outstanding interest account

• Debit outstanding interest account and credit interest account

• Debit profit and loss account and credit loan account

• Debit loan account and credit profit and loss account

What is the rectification entry when sale of machinery is wrongly included in sales account?

• Debit profit and loss account and credit sales account

• Debit sales account and credit profit and loss account

• Debit sales account and credit machinery account

• Debit machinery account and credit sales account

If carriage inward for new machinery is wrongly included in carriage inward account, what is the rectification entry?

• Debit carriage inward account and credit profit and loss account

• Debit profit and loss account and credit carriage inward account

• Debit machinery account and credit carriage inward account

• Debit carriage inward account and credit machinery account

What is the journal entry for unrecorded purchases?

• Debit creditors account and credit purchase account

• Debit purchase account and credit creditors account

• Debit sales account and credit debtors account

• Debit debtors account and credit sales account

How should unrecorded sales be accounted for?

• Debit sales account and credit creditors account

• Debit creditors account and credit sales account

• Debit debtors account and credit sales account

• Debit sales account and credit debtors account

What should be calculated on new balances of sundry debtors in case of unrecorded sales?

• Reserve for depreciation

• Reserve for discounts to creditors

• Reserve for doubtful debts

• Reserve for capital receipts