Quote:
Originally Posted by seher bano
Seniors, please solve my problem regarding adjusting entries...
i am expert in making adjusting entries, but i through out my academic career studied meigs and meigs. adjusting entries in meigs and meigs and that of M.A Ghani ( in final accounts is different).
I am confused about the entries of both of these books.
e.g... we have paid rent in advance(as per meigs and meigs) at the time of financial statments, our entries would be this:
Rent expence(dr)................... Rs. 1000
Prepaid Rent(cr).................................Rs. 1000.
However, as per M.A ghani( in final accouts) our entries would be this:
Prepaid Rent A/c(dr)......................Rs. 1000
To Rent A/c(cr).............................Rs. 1000
Please guide in this regard. There are many other entries of the same kind.
Edit/Delete Message
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First entry is for the opening of new period while second was made during the closing of the period....
for example: when we close the period and we have some amount of rent is extra then it will be c/f for new period. so the entry will be
Prepaid rent account (dr)................xxx
rent expense/rent a/c (cr)..............xxx
in the same way for the new period the entries will be reverse as
Rent expense/rent a/c (dr)..............xxx
prepaid rent a/c (cr).......................xxx
If im wrong then plz correct it..............