Preparation of Financial Statements for Companies (Grade 12 NSC Matric Accounting): Flashcards
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Pre-adjustment trial balance
Pre-adjustment trial balance
Initial trial balance before year-end adjustments
3 steps to prepare financial statements
3 steps to prepare financial statements
Enter pre-adj figures, process adjustments, calc final figures
Prepaid expenses on balance sheet
Prepaid expenses on balance sheet
Current asset (unused portion of advance payment)
Accrued expenses
Accrued expenses
Expenses incurred but not yet paid or recorded
Income received in advance
Income received in advance
Liability (owe service/product to customer)
Depreciation rate for vehicles
Depreciation rate for vehicles
10% per annum at cost price
Provision for bad debts %
Provision for bad debts %
Usually 5% of total debtors
Outstanding/accrued amounts adjustment
Outstanding/accrued amounts adjustment
Added (+) to original figures
Prepaid/advance amounts adjustment
Prepaid/advance amounts adjustment
Subtracted (-) from original figures
Dual effect principle
Dual effect principle
Every adjustment impacts both income statement & balance sheet