2.5.4 - Important Adjustments in Final Accounts
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Practice Questions
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Define depreciation in your own words.
💡 Hint: Think about how value decreases over time.
What are outstanding expenses?
💡 Hint: These are expenses looming over the accounts.
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Interactive Quizzes
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What is the purpose of depreciation in accounting?
💡 Hint: Think about asset treatment in accounting.
True or False: Prepaid expenses are recorded as liabilities.
💡 Hint: Reflect on when expenses are recognized.
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Challenge Problems
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A company has made provisions for taxes worth ₹20,000, accrued income of ₹8,000, and outstanding expenses of ₹5,000. Prepare the relevant journal entries.
💡 Hint: Consider how each item would appear in double-entry bookkeeping.
Discuss the potential impact on a company's final accounts if outstanding expenses are not recorded. Provide an example.
💡 Hint: Reflect on how accurate financial health depends on proper recording.
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