Financial Statements (With Adjustments) — Chapter Summary

Accounting adjustments are made before preparing

Accounting adjustments are made before preparing financial statements so that income, expenses, and assets are recorded correctly for the accounting y

Closing stock is the stock

Closing stock is the stock of goods which remains unsold at the end of the accounting year. It is normally not shown inside the Trial Balance and appe

An expense which relates to

An expense which relates to the current year but has not been paid till the end of the accounting year is known as outstanding expenses. Examples incl

A part of expenses paid during

A part of expenses paid during the current year may relate to future year(s). Such part is called prepaid expenses or expense paid in advance.

Depreciation is the decrease in

Depreciation is the decrease in the value of fixed assets due to use, wear and tear. It is an expense like any other business expense.