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Final account of joint stock companies with adjustment entry?
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Final account of joint stock companies with adjustment entry?
Final Accounts of Joint Stock Companies with Adjustment Entry
Joint stock companies are the most popular form of business organization. The final accounts of a joint stock company are prepared at the end of the financial year. These accounts are prepared to show the financial position of the company at the end of the year. The final accounts of a joint stock company consist of the following two statements:
1. Profit and Loss Account
2. Balance Sheet
Adjustment Entries in Final Accounts
Adjustment entries are made to record the expenses and incomes relating to the current financial year but not recorded in the books of accounts. The adjustment entries are made to ensure that the final accounts show the correct financial position of the company.
The following are the adjustment entries that are made in the final accounts of a joint stock company:
1. Depreciation on Fixed Assets:
Depreciation is a non-cash expense that is charged against the profit of the company. The adjustment entry for depreciation is made to reduce the value of fixed assets and to show the correct value of assets in the balance sheet.
2. Outstanding Expenses:
Outstanding expenses are the expenses that are due but not paid at the end of the financial year. The adjustment entry for outstanding expenses is made to show the correct liability of the company in the balance sheet.
3. Prepaid Expenses:
Prepaid expenses are the expenses that are paid in advance but relate to the next financial year. The adjustment entry for prepaid expenses is made to show the correct asset of the company in the balance sheet.
4. Accrued Income:
Accrued income is the income that is earned but not received at the end of the financial year. The adjustment entry for accrued income is made to show the correct asset of the company in the balance sheet.
5. Income Received in Advance:
Income received in advance is the income that is received in advance but relates to the next financial year. The adjustment entry for income received in advance is made to show the correct liability of the company in the balance sheet.
Conclusion
In conclusion, the final accounts of a joint stock company are prepared to show the financial position of the company at the end of the year. The adjustment entries are made to ensure that the final accounts show the correct financial position of the company. The adjustment entries for depreciation, outstanding expenses, prepaid expenses, accrued income, and income received in advance are made to show the correct financial position of the company.
Joint stock companies are the most popular form of business organization. The final accounts of a joint stock company are prepared at the end of the financial year. These accounts are prepared to show the financial position of the company at the end of the year. The final accounts of a joint stock company consist of the following two statements:
1. Profit and Loss Account
2. Balance Sheet
Adjustment Entries in Final Accounts
Adjustment entries are made to record the expenses and incomes relating to the current financial year but not recorded in the books of accounts. The adjustment entries are made to ensure that the final accounts show the correct financial position of the company.
The following are the adjustment entries that are made in the final accounts of a joint stock company:
1. Depreciation on Fixed Assets:
Depreciation is a non-cash expense that is charged against the profit of the company. The adjustment entry for depreciation is made to reduce the value of fixed assets and to show the correct value of assets in the balance sheet.
2. Outstanding Expenses:
Outstanding expenses are the expenses that are due but not paid at the end of the financial year. The adjustment entry for outstanding expenses is made to show the correct liability of the company in the balance sheet.
3. Prepaid Expenses:
Prepaid expenses are the expenses that are paid in advance but relate to the next financial year. The adjustment entry for prepaid expenses is made to show the correct asset of the company in the balance sheet.
4. Accrued Income:
Accrued income is the income that is earned but not received at the end of the financial year. The adjustment entry for accrued income is made to show the correct asset of the company in the balance sheet.
5. Income Received in Advance:
Income received in advance is the income that is received in advance but relates to the next financial year. The adjustment entry for income received in advance is made to show the correct liability of the company in the balance sheet.
Conclusion
In conclusion, the final accounts of a joint stock company are prepared to show the financial position of the company at the end of the year. The adjustment entries are made to ensure that the final accounts show the correct financial position of the company. The adjustment entries for depreciation, outstanding expenses, prepaid expenses, accrued income, and income received in advance are made to show the correct financial position of the company.
Community Answer
Final account of joint stock companies with adjustment entry?
Depreciation is charged on fixed assets due to use like plant , machine, vehicle and it is shown in the P&L debit side because this is company expense
2. outstanding expenses are expense of company which is not paid in the current year and it is due . the company is liable to pay of the outstanding expenses and it is company liability to pay of that's why it is added to the expense and then outstanding expenses shown in the liability side
3. prepaid expenses are those expenses which are paid already by the company before the expense shown in financial position statement and it's a asset of the company because after prepaid company is not liable to pay of the expense again and the prepaid expenses deducted from the expense
4. accurate income is income which is received in the aggregate amount and this is income, it should be recorded in the asset side
5. Income received in advance this is liability of the company because which is not income of the current year this is next year income which we received in advance and this income shown in next year balance sheet but now for the current purpose this is companies liability
2. outstanding expenses are expense of company which is not paid in the current year and it is due . the company is liable to pay of the outstanding expenses and it is company liability to pay of that's why it is added to the expense and then outstanding expenses shown in the liability side
3. prepaid expenses are those expenses which are paid already by the company before the expense shown in financial position statement and it's a asset of the company because after prepaid company is not liable to pay of the expense again and the prepaid expenses deducted from the expense
4. accurate income is income which is received in the aggregate amount and this is income, it should be recorded in the asset side
5. Income received in advance this is liability of the company because which is not income of the current year this is next year income which we received in advance and this income shown in next year balance sheet but now for the current purpose this is companies liability
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Final account of joint stock companies with adjustment entry?
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Final account of joint stock companies with adjustment entry? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Final account of joint stock companies with adjustment entry? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Final account of joint stock companies with adjustment entry?.
Final account of joint stock companies with adjustment entry? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Final account of joint stock companies with adjustment entry? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Final account of joint stock companies with adjustment entry?.
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