Question

In: Accounting

1) which balance day adjustments are classified as current liabilities in the balance sheet ? 2)...

1) which balance day adjustments are classified as current liabilities in the balance sheet ?

2) cartage outwards is transferred to what ledger account in the balance sheet?

Expert Solution

solution 1)

Before reaching to the conclusion we must know what is "balance day" and balance day "adjusment" ?

The last day or end of a period is called a balance day.

Balance day adjustments are the adjustments entries made in revenue and expense accounts on balance day (last day or end of period ) to make equal revenue earned and expenses incurred.

BALANCE DAY ADJUSTMENTS WHICH ARE CLASSIFIED AS CURRENT LIABILITIES IN BALANCE SHEET:-

1. accounts payable ( amount which is payable to vendors or suppliers )

2. accrued expenses

3. short term notes

4. deferred revenue

5. long term debt ( only current portion i.e .. principle payments which are to be maded within one year )

solution 2)

** carriage outwards **** ( not cartage )

let first know what is carriage outwards ?

carriage outward is the handling cost that a seller is incurring to ship goods to customers . ( eg. delivery expense )

carriage outwards must be appeared on the income statement as an operating expense in the same period in which sale took place .

ekkarill92 answered 1 year ago

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