What adjusting entries would you record for the following?(a) Deprecia

1.	What adjusting entries would you record for the following?(a) Depreciation (b) Discount on debtors (c) Interest on capital (d) Manager’s commission
Answer» a. It is treated as a business expense and is debited to profit and loss account. In the balance sheet, the asset will be shown at cost minus the amount of depreciation. b. It is treated as a business expense and is debited to profit and loss account. It will be shown as a deduction from the debtors account to portray correctly the expected reliable value of debtors. c. It is shown as an expense on the debit side of the profit and loss account and added toe capital in the balance sheet. d. It is shown as an expense on the debit side of the profit and loss account and on liability side in the balance sheet.

What adjusting entries would you record for the following?(a) Depreciation (b) Discount on debtors (c) Interest on capital (d) Manager’s commission

Answer»

a. It is treated as a business expense and is debited to profit and loss account. In the balance sheet, the asset will be shown at cost minus the amount of depreciation.

b. It is treated as a business expense and is debited to profit and loss account. It will be shown as a deduction from the debtors account to portray correctly the expected reliable value of debtors.

c. It is shown as an expense on the debit side of the profit and loss account and added toe capital in the balance sheet.

d. It is shown as an expense on the debit side of the profit and loss account and on liability side in the balance sheet.

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