Adjustment for Outstanding Expenses

Q. Calculate the due dates of the bills in the following cases:

Date of Bill		Tenure (Period)
(i)	1st December, 2017	60 Days
(ii)	30th April, 2018	2 Months
(iii)	28th January, 2018	1 Month
(iv)	23rd November, 2017	2 Months
(v)	29th May, 2017	4 Months

Q. Rent due but not paid is to be treated as .

1. outstanding expense
2. accrued income
3. prepaid expense
4. unearned income

Q.

Rent due but not paid is to be treated as _______

1. Outstanding Expense

2. Accrued Income

3. Prepaid Expense

4. Unearned Income

Q. Rectify the following errors assuming that there is no Suspense Account:
(i) The Returns Inward Book has been overcast by ₹ 200.
(ii) Purchases Book carried forward ₹ 75 less.
(iii) Sales Book carried forward ₹ 41 less on Page 10 and ₹ 43 more on Page 12.
(iv) Goods sold to Gautam were posted as ₹ 215 instead of ₹ 251.

Q. Rectify the following errors:
(i) The Sales Book of December was added short by ₹ 500.
(ii) A periodical total of the Purchases Book was cast short by ₹ 5, 000.
(iii) The total of Purchases Return Book has been undercast by ₹ 1, 500.
(iv) The Sales Return Book is added ₹ 200 short.

Q.

What is the entry passed for adjusting outstanding expenses?

1. Outstanding Expenses A/c Dr

   To Cash A/c

2. Expenses A/c Dr

   To Cash A/c

3. Expenses A/c Dr

   To Outstanding Expenses A/c

4. Outstanding Expenses A/c Dr

   To Expenses A/c

Q.

What do you mean by Contingent Liability?

Q.

Salary paid to Ramesh is Rs 20, 000 per month. Salary is paid to him on 5th of next month for the services rendered by him during the previous month. What shall be the amount of outstanding salary as on 31st March 2018?

1. Rs. 40, 000

2. Rs. 3, 500

3. Rs. 20, 000

4. Rs. 10, 000

Q. For passing adjusting entry for expenses payable, account is debited and account is credited.

1. Expenses
2. Prepaid expenses
3. Outstanding expenses
4. Cash

Q.

Outstanding expenses are regarded as ___

1. Contingent Liability

2. Capital

3. Current Liability

4. Asset

Q.

Which account is debited while passing the adjustment entry for outstanding expenses?

1. Outstanding expense account

2. Prepaid expense account

3. Expense account

4. None of the above

Q.

From the following Trial Balance of Mr. Kapil, you are required to prepare Trading Profit & Loss Account for the year ended 31st March, 2010 and Balance Sheet as on that date.

Trial Balance as on 31st March, 2010
Particulars	Debit Amount Rs	Credit Amount Rs
Opening Stock	58, 000
Wages and Salary	6, 500
Carriage	2, 500
Purchases and Sales	63, 000	1, 26, 000
Bills Receivable and Bills Payable	600	1, 000
Rent	3, 500
R.D.D.		800
Sundry Debtors and Sundry Creditors	15, 000	16, 000
Returns	1, 000	500
Machinery	12, 000
Travelling expenses	3, 000
Cash at Bank	1, 000
Buildings	25, 000
Office expenses	2, 700
Advertisement (For 3 Years)	3, 000
Drawings	2, 500
Capital		30, 000
Insurance	600
General Reserve		25, 600
Total	1, 99, 900	1, 99, 900

Q.

Which account is credited while passing the adjustment entry for outstanding expenses?

1. Prepaid expense account

2. Outstanding expense account

3. Expense account

4. None of the above

Q.

Form the following Trial Balance of M/s Deven Traders you are require to Prepare Trading, Profit and Loss A/c for the year ending 31st March, 2011 and Balance Sheet as on that date.

Trial Balance as on 31st March, 2011
Particulars	Amount Rs	Particulars	Amount Rs
Opening Stock Purchases Wages Investments Carriage outward Printing & stationery Insurance Salaries Postage and Telegram Machinery Furniture Debtors Bills Receivable Cash at Bank Advertisement Bad debts Carriage Inward	15, 000 45, 700 9, 900 3, 500 4, 600 3, 400 750 10, 000 700 26, 800 6, 400 25, 000 4, 000 6, 000 1, 000 250 4, 500	Capital Bills payable Outstanding Salary Sales Creditors Bank overdraft	60, 000 11, 000 1, 700 79, 800 12, 000 3, 000
Total	1, 67, 500	Total	1, 67, 500

Q.

Outstanding expenses as at the end of the financial year are Rs. 40, 000 which are given in adjustments. The profit before taking this into consideration is Rs. 8, 00, 000. What is the correct profit?

1. Rs. 8, 00, 000
2. Rs. 8, 40, 000
3. Rs. 7, 60, 000
4. Rs. 8, 80, 000

Q. What do you understand by outstanding expenses?

1. Expenses which have been paid for a period exceeding the current financial year
2. Expenses which have been incurred but not been paid
3. Expenses which have been incurred & paid
4. Expenses which have not been incurred

Q.

Enter the following transactions in a petty cash book having analysis columns for the month of October 2011.

2011 Oct.
1	Received from Head cashier Rs 1, 350.
3	Paid packing charges Rs 102.
6	Paid for telegram Rs 43.
9	Purchased 3 office file of Rs 25 each.
13	Gave tips to watchman Rs 20.
8	Gave advance to clerk Mr. Shrikant Rs 280.
22	Paid for printing Rs 162.
25	Paid to Sakal newspaper for advertisement Rs 274.
27	Paid cleaning and washing charges Rs 46.
29	Gave donation for Diwali celebration Rs 150
31	Purchased revenue stamps Rs 65.

Q. Outstanding expenses are regarded as .

1. current asset
2. current liability
3. Non-current asset
4. Capital

Q.

Prepare Trading Profit & Loss Account for the year ending 31st March, 2010 and Balance Sheet as on that date of M/s Sunit Kulkarni, Shahada from the following Trial Balance.

Trial Balance as on 31st March, 2010
Particulars	Debit Amount Rs	Credit Amount Rs
Opening Stock	25, 000
Purchase and Sales	1, 30, 000	1, 80, 000
Returns	2, 000	5, 000
Sundry Debtors and Sundry Creditors	20, 000	25, 000
Wages	4, 000
Furniture	11, 000
Machinery	30, 000
Advertisement (for 2 years)	4, 000
Salaries	8, 000
Investment	6, 000
Insurance	500
Cash in hand	900
Cash at Bank	8, 000
Postage and Telegram	1, 000
Commission		500
Reserve Fund		4, 000
Bills Payable		6, 000
R.D.D.		500
Capital		31, 000
Drawings	1, 600
Total	2, 52, 000	2, 52, 000

Q. Any revenue expense for which a separate fund is available will be ___________.

1. credited to the separate fund
2. debited to that separate fund
3. debited to income and expenditure account
4. capital issues and shown in the balance sheet

Q.

Sharma co. Whose books are closed on 31st december, purchased a machinery for rs.1, 50, 000 on 1st january, 2005, additional machinery was acquired for rs.50, 000 on 1st july, 2005.certain machinery which was purchased for rs.50, 000 on 1st july, 2005 was sold for rs.40, 000 on 30th june, 2007.

Prepare the machinery account and accumulated depriciation account for all the years up to the year ended 31st december, 2007.depriciation is charged 10% p.a. on straight line method.also, show the machinery disposal account.