Review of Repeatedly Asked Adjustments in Manufacturing Companies

This video tutorial reviews common financial adjustments in a manufacturing company's accounts, focusing on journal entries and their dual effects on financial statements. Topics include closing stock, outstanding and prepaid expenses, income adjustments, bad debts, and provisions for doubtful debts and discounts. The tutorial provides practical examples and hints for understanding these adjustments, crucial for exams.

What is the journal entry for closing stock in a manufacturing company?

• Closing stock account, debit to trading account

• Manufacturing account, debit to closing stock account

• Closing stock account, credit to manufacturing account

• Trading account, debit to closing stock account

Where is the second effect of closing stock recorded in the financial statements?

• Credit side of the trading account

• Debit side of the profit and loss account

• Asset side of the balance sheet

• Liability side of the balance sheet

What is the journal entry for outstanding expenses?

• Outstanding expenses account, credit to expenses account

• Expenses account, credit to outstanding expenses account

• Expenses account, debit to outstanding expenses account

• Outstanding expenses account, debit to expenses account

How are prepaid expenses recorded in the financial statements?

• Deducted from liabilities in the balance sheet

• Added to expenses in the profit and loss account

• Added to liabilities in the balance sheet

• Deducted from expenses in the profit and loss account

What is the journal entry for income received in advance?

• Income received in advance account, credit to income account

• Income account, debit to income received in advance account

• Income received in advance account, debit to income account

• Income account, credit to income received in advance account

Where is the second effect of income due but not received recorded?

• Debit side of the profit and loss account

• Liability side of the balance sheet

• Credit side of the trading account

• Asset side of the balance sheet

What is the journal entry for bad debts?

• Debtors account, credit to bad debts account

• Bad debts account, debit to debtors account

• Debtors account, debit to bad debts account

• Bad debts account, credit to debtors account

How is a provision for doubtful debts recorded in the profit and loss account?

• Added to income

• Deducted from income

• Added to expenses

• Deducted from expenses

What is the journal entry for provision for discount on debtors?

• Profit and loss account, credit to provision for discount account

• Provision for discount account, credit to profit and loss account

• Profit and loss account, debit to provision for discount account

• Provision for discount account, debit to profit and loss account

Where is the effect of provision for discount from creditors recorded?

• Asset side of the balance sheet

• Debit side of the profit and loss account

• Credit side of the profit and loss account

• Liability side of the balance sheet