Carriage inwards = Carriage on purchases recorded in the trading account
Carriage outwards = Carriage on sales recorded in the profile and loss account
Return inwards = Sales returns recorded in the trading Account
Return outwards= Purchases returns recorded in the trading
Adjustments! How to handle them? Some common ones are:
1. Bank charges $200 has been omitted from the books:
Bank charges = Expense in the profit and loss account
Deduct from cash in bank or add to bank overdraft
2. Prepaid rent expense $250:
Deduct from rent expense $250
Record in the balance sheet as current asset
3. Outstanding wages amounted to $300:
Add to wages expense $300
Record in the balance sheet as current liability
4. Depreciation of motor vehicle at 10% p.a on cost:
Take note when question says on cost=straight line method
Depreciation = Expense in profit and loss account
Add it to provision for depreciation, recorded in the balance sheet as fixed asset
I wish all of you the best in your exams!
Want to know more? All these tips can also be found in the assessment books that are available in Major Bookstores now! Get more practice and do well!
For more information on lessons, please visit http://jayceetuition.com
Or visit the tuition centre where I teach! at 545 Orchard Road #04-06, Far East Shopping Centre.