How to fill in the adjustments columns
Each year-end adjustment is a journal. Put both halves in the adjustments columns, add rows where needed, and check the totals.
Task 1Each adjustment is a journal4 questions
Every year-end adjustment is a journal: a debit and a credit of the same amount. Each half is written in the adjustments columns, on the row of its account.
Tarn Garden Supplies has three adjustments at 31 March.
- Closing inventory has been counted and valued at £2,400
- Rent of £300 for March has not been paid or recorded
- A customer who owes £400 has gone out of business, and the debt is to be written off
- Closing inventory
- debit Closing inventory (statement of financial position), credit Closing inventory (statement of profit or loss)
- An expense owed but not yet recorded
- debit the expense, credit Accruals
- A debt written off
- debit Irrecoverable debts expense, credit Trade receivables
Task 2New rows and column totals3 questions