Adjustments at a glance

Adjustment Journal Entry Adjustment in Adjustment in

Trading and P/L A/c Balance sheet
1. Closing stock Closing stock A/c Dr. Posted at the credit Shown at the assets
To Trading A/c side of Trading A/c side
2. Depreciation Depreciation A/c Dr. Posted at the debit Shown as deducted
To Asset side of P/L A/c from concerned asset
3. Appreciation Asset A/c Dr. Posted at the credit Shown as added to
To Appreciation A/c side of P/L A/c concerned asset
4. Outstanding Expenses A/c Dr. Added to the Shown at the liabilities
Expenses To Outstanding concerned expenses side.
Expenses A/c at the debit side of
P/L or Trading A/c
5. Prepaid Prepaid Expenses A/c Dr. Deducted from the Shown at the assets
expenses To expenses A/c concerned expenses side
at the debit side P/L
A/c
6. Accrued income Accrued Income A/c Dr. Added to the Shown at the assets
To Income A/c concerned income at side
the credit side of P/L
A/c
7. Unearned Income A/c Dr. Deducted from Shown at the liabilities
Income To Unearned concerned income at side
Income A/c the credit side of P/L
A/c
8. Interest on Interest on capital A/c Dr. Posted at the debit Added to capital at the
capital To capital A/c side of P/L A/c liabilities
9. Interest on Drawings A/c Dr. Posted at the credit Deducted from capital
drawings To interest on side of P/L A/c at the liabilities side.
drawings A/c
10. Interest on Investment A/c Dr. Posted at the credit Added to investment
investment To Interest on side of P/L A/c at the assets side
investment A/c
11. Interest on Interest on loan A/c Dr. Posted at the debit Added to loan at the
loan(Borrowed) To Loan A/c side of P/L A/c liabilities side
12. Interest on Loans A/c Dr. Posted at the credit Added to loan at the
Loans(Advanced To Interest on side of P/L/ A/c assets side
) loans A/c
13. Bad debts Bad debts A/c Dr. Posted at the debit Deducted from
To Debtors A/c side of P/L A/c debtors at the assets
side
14. Provision for P/L/ A/c Dr. Posted at the debit Deducted from
bad debts To Provision for side of P/L A/c debtors at the assets
bad debts A/c side
15. Provision for P/L A/c Dr. Posted at the debit Deducted from
discount on To Provision for side of P/L A/c debtors at the assets
debtors discount on debtors side

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16. Provision for Provision for discounts Posted at the credit Deducted from
discount on on creditors A/c Dr. side of P/L A/c creditors at the
creditors To P/l A/c liabilities side
17. Accidental loss of Loss of stock A/c Dr. Deducted from No Effect
stock To Trading A/c purchases or posted at
Or To Purchases the credit side of
A/c Trading A/c and also at
the debit side of P/L
A/c
18. Accidental loss of Insurance Co. A/c Dr. Insurance co. A/c will Insurance Co. A/c will
goods(If insured) Loss of Stock A/c Dr. be shown with the be shown at the assets
(Partial admission To Trading A/c amount of claim side.
of claim) admitted by Co. loss of
stock will be shown
with the amount of the
claim not admitted at
the credit side of
Trading A/c. Loss of
stock will also be
shown at the debit side
of P/L A/c
19. Loss of assets by Loss by fire A/c Dr. Loss by fire A/c will be Loss will be deducted
fire( If not insured) To Asset A/c shown at the debit side from the asset at the
of P/L A/c assets side
20. Accidental loss of Insurance Co. A/c Dr. Loss by fire A/c will be Insurance Co. A/c will
assets (If Loss by fire A/c Dr. shown at the debit side be shown at the asset
insured) (Partial To Assets A/c of P/L A/c side, loss by fire A/c
admission) will be deducted from
the Asset.
21. Outstanding P/L A/c Dr. Posted at the debit Shown at the liabilities
Managers To Outstanding side of P/L/ A/c side
commission manager’s
commission A/c
22. Goods sent on Sales A/c Dr.8000 Rs.8000 will be Rs.8000deducted from
sale on return To Debtors A/c 8000 deducted from sales debtors and Rs.6000
basis treated as And and Rs.6000 will be added to stock at the
sales (cost of Stock A/c Dr.6000 added to closing stock assets side
goods 6000 To Trading A/c 6000 at the credit side of
included in sales Trading A/c
8000)
23. Goods taken by Drawings A/c Dr. Amount of goods Amount of goods
the proprietor for To Purchases A/c taken by the proprietor taken by the proprietor
personal use will be deducted from will be deducted from
purchases in trading capital at the liabilities
A/c side
24. Goods given as Charity A/c Dr. Deducted from Deducted from capital
charity To Purchases A/c purchase at the debit at the liabilities side
side of Trading A/c

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25. Goods distributed Advertising A/c Dr. Posted at the debit No Effect
as free samples Or side of P/L A/c.
Free Sample A/c Dr. Also deducted from
To Purchases A/c purchases A/c
26. Wages paid for Building A/c Dr. The amount will The amount will
construction of To wages A/c deducted from wages beaded to building at
building was at the debit side of the assets side
debited to wages Trading A/c
A/c
27. Goods in transit Goods in transit A/c Dr No effect Goods in transit A/c
(goods were not To Supplier’s A/c will be shown at the
received although assets side. Supplier’s
title to goods were A/c will be shown at
received) liabilities side
28. Remuneration paid Salaries A/c Dr. Added to salaries at Deducted from
to employee was To Employee’s the debit side of P/L/ debtors at the assets
debited to his Personal A/c A/c side.
personal A/c