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FINAL ACCOUNTS
Accrued Expenses
1 January
31 October
RM4,000 paid
31 December
RM800 accrued
Rent incurred=RM4,800
2
Prepaid Expenses
Prepaid expenses are expenses that have not been incurred but
the amounts have been paid
Total insurance of RM 3000 has been paid for the period 1
January 2010 to 31 March 2011. The financial year ends on 31
December 2010. The monthly insurance is RM 200, show the
balance day adjustment for insurance.
1 Jan 2010
31 December 2010
RM2400 incurred
31 March 2011
RM600 prepaid
Accrued Revenues
30 September
RM900 received
Rent Earned RM1,200
31 December
RM300 accrued
4
31 December 2010
31 January 2011
RM200 in advance
Add up expenses ~ in IS
Current Liabilities ~ in BS
Prepaid Expenses
Reduce expenses ~ in IS
Current Assets ~ in BS
Accrued Revenues
Add up revenue ~ in IS
Current Assets ~ in BS
Bad Debts
Debts that are considered irrecoverable after all efforts have
been made to collect them are called bad debts
Bad Debts are treated as a loss or an expense to a business.
Depreciation
Adjustment to final account
First made depreciation
Depreciation ~ expenses side in IS
Less accumulated depreciation (from fixed asset cost)
~ in BS
Depreciation already exist
Depreciation ~ expenses side in IS
Accumulated depreciation (add up from accumulated
for depreciation that already exist) ~ than deduct fixed
asset at cost ~ in BS
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Question 1 :
The following trial balance was extracted from the books of Ahmad Shoes at the year ended
31/12/2010;
Debit
(RM)
Credit
(RM)
11,280
19,740
Cash at bank
1,140
Cash in hand
210
Capital as at 1/1/2010
9,900
Drawings
2,850
Office furniture
1,440
Rent
1,020
2,580
Discounts
690
360
4,920
2,490
Inventory as at 1/1/2010
2,970
270
2,400
Maintenance expenses
450
Bad debts
810
32,760
32,760
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continue..
Notes:
a.
b.
c.
d.
e.
f.
Required:
Draw up the Income Statement for the year ended 31/12/2010
together with a Balance Sheet as on 31/12/2010.
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