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Read MoreShow the treatment of prepaid expenses d | Class 11 Accountancy Chapter Financial Statements - 2, Financial Statements - 2 NCERT Solutions
Q3.
Show the treatment of prepaid expenses depreciation, closing stock at the time of preparation of final accounts when:
(a) When given inside the trial balance?
(b) When given outside the trial balance?
Treatment of prepaid expenses, depreciation and closing stock at the time of preparing the final account :
(a) When Given Inside the Trial Balance
Prepaid Expenses When prepaid expenses are given in the trial balance itself it will be treated as current assets only and will be posted in the Assets Side of the balance sheet. No further adjustment will be required in this case
Depreciation When depreciation is given in the trial balance it will be treated as an expenditure and will be shown in the debit side of the Profit and Loss Account. No further adjustment will be required in this case.
Closing Stock When closing stock is given in the trial balance it will purely be treated as assets and will be shown only in the Assets Side of the Balance sheet. No further adjustment will be required in this case.
(b) When Given Outside the Trial Balance
Prepaid Expenses When prepaid expenses are given outside the trial balance it will be treated as an Adjustment and will be posted at two places first of all it will be deducted from the concerned expenses in the debit side of Profit and Loss Account and after that it will be treated as current assets and will be posted in the Assets side of the Balance Sheet.
Depreciation When depreciation is given outside the trial balance it will be treated as an adjustment and will be posted at two places to comply with the rules of double entry book keeping system. First of all the amount of depreciation will be shown in the debit side of Profit and Loss account as an expenditure and the amount of depreciation will be deducted from the concerned assets in the assets side of Balance Sheet.
Closing Stock When closing stock is given outside the trial balance It will purely be treated as an adjustment and will be posted at two places first of all the amount of closing stock will be shown at the credit side of Trading Account and after that it will be shown as an assets in the Assets side of the Balance Sheet.
Study Tips for Answering NCERT Questions:
NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:
- Read the question carefully and focus on the core concept being asked.
- Reference examples and data from the chapter when answering questions about Financial Statements - 2.
- Review previous year question papers to get an idea of how such questions may be framed in exams.
- Practice answering questions within the time limit to improve your speed and accuracy.
- Discuss your answers with your teachers or peers to get feedback and improve your understanding.
Important Questions & Answers
Why is this answer important for exams?
This question is important because it tests key concepts from the NCERT syllabus and is frequently asked in CBSE exams.
Which NCERT concept is used in this question?
This question is based on core NCERT concepts explained in the chapter and should be revised thoroughly before exams.
What common mistakes should be avoided in this question?
Students often lose marks by skipping steps, writing incomplete explanations, or misunderstanding keywords used in the question.
What is the correct answer to: Show the treatment of prepaid expenses depreciation, closing stock at the time of preparation of final accounts when: (a) When given inside the trial balance? (b) When given outside the trial balance??
Treatment of prepaid expenses, depreciation and closing stock at the time of preparing the final account :
(a) When Given Inside the Trial Balance
Prepaid Expenses When prepaid expenses are given in the trial balan...
How do you solve Show the treatment of prepaid expenses depreciation, closing stock at the time of preparation of final accounts when: (a) When given inside the trial balance? (b) When given outside the trial balance? step by step?
Step-by-step explanation:
• Treatment of prepaid expenses, depreciation and closing stock at the time of preparing the final account :
•
• (a) When Given Inside the Trial Balance
•
• Prepaid Expenses When prepaid expenses are given in the trial balance itself it will be treated as current assets only and will be posted in the Assets Side of the balance sheet
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