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Adjustment Entries: Introduction Video Lecture | Accountancy Class 11 - Commerce

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FAQs on Adjustment Entries: Introduction Video Lecture - Accountancy Class 11 - Commerce

1. What are adjustment entries in accounting?
Ans. Adjustment entries in accounting are journal entries made at the end of an accounting period to adjust certain balances. These entries ensure that the financial statements accurately reflect the financial position of a company.
2. Why are adjustment entries necessary in accounting?
Ans. Adjustment entries are necessary in accounting to correct errors, match revenues and expenses to the appropriate accounting period, and ensure that the financial statements provide a true and fair view of the company's financial position.
3. What are some common types of adjustment entries?
Ans. Common types of adjustment entries include accruals, deferrals, depreciation, bad debt provisions, and inventory adjustments. These entries help align the financial statements with the economic activities of the company.
4. How do adjustment entries impact the financial statements?
Ans. Adjustment entries impact the financial statements by adjusting the balances of certain accounts, such as revenues and expenses. These adjustments can affect the net income, retained earnings, and overall financial position of the company.
5. When should adjustment entries be recorded in accounting?
Ans. Adjustment entries should be recorded at the end of an accounting period, typically before the financial statements are prepared. This ensures that the financial statements accurately reflect the financial activities of the company during the specific period.
82 videos|105 docs|42 tests

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