Adjustment hesitation

[fahim13]

Purchases of merchandise of RS. 33000 on credit and taken into stock but there is no entry in books?

What will effect on trading and profit and loss account and in balance sheet

[mani1]

Stock 33000
Accounts Payable 33000

No effect on Trading and profit and loss account. In B/S add amount in accounts payable

[fahim13]

Originally Posted by mani1

Stock 33000
Accounts Payable 33000

No effect on Trading and profit and loss account. In B/S add amount in accounts payable

i think that effect of 33000 will be added in purchases books

Purchases 50,000(approx)
+ Unrecorded 33,000
______ 83,000

and 2nd will be as on you described!!!

ok?

[Rixwan]

Originally Posted by fahim13

i think that effect of 33000 will be added in purchases books

Purchases 50,000(approx)
+ Unrecorded 33,000
______ 83,000

and 2nd will be as on you described!!!

ok?

as this is given that only 33,000 is not recorded therefore you will have to make entry of 33,000 only.

i.e
Purchases 33,000 DR
A.Payable 33,000 CR

[me320]

add 33000 to Purchases in trading account and 33000 to account payable or sundry creditors in balance sheet.

[yasirjamalchishti]

Hi,

if the entry is not recorded than record it simply. as per my understanding this entry will effect the P and Loss A/c and balance sheet as well.

1. Trading and Profit and Loss A/c.

if you will not record the purchases, it will reduce ur cost of goods sold which results in decreasing Gross and Net profit.

2. Balance Sheet:

Closing stock will be undervalued, liabilities will be also undervalued. equity will be understated.

its according to best of my knowledge.

Regards,

M. Yasir Jamal