Adjustments in Final Accounts

Closing Stock

Trading A/c: Cr
Balance Sheet: Assets

O/S Expenses

Added to Expense in P/L
Balance Sheet: Liabilities

Prepaid Expenses

Deducted from expenses in P/L a/c
Balance sheet: Assets

Accrued Income

Added to income (interest, commission, etc.) in P/L
Balance Sheet: Assets

Income received in Advance

Deducted from income in P/L A/c
Balance Sheet: Liabilities

Depreciation

P/L: Dr side
Balance Sheet: Deducted from fixed asset

Bad debt

P/L: Dr side
Balance sheet: Deducted from debtors

Bad debt recovered

P/L: Cr side

Provision for doubtful debt

P/L: Dr side

Interest on Capital

P/L: Dr side
Balance Sheet: Added to Capital (Liabilities)

Staff welfare/ Samples

P/L: Dr
Trading A/c: Deduct from purchases

Drawings

Trading A/c: Deduct from purchases
Balance Sheet: Liabilities (deduct from capital)

Loss by Fire (Insured)

Trading: Deduct from purchases
P/L: Dr side (deduct insurance amt)
Balance Sheet: Assets (Insurance Company)