Final Accounting Adjustments

CLOSING STOCK

Adjustments in final accounts are the process of recording all those items which have not been including in the trial balance.
The items that typically require adjustments at the time of preparation of final accounts are

•Closing Stocks: Closing stock is the stock of goods that remain unsold at the end of the trading period.

JOURNAL ENTRIES FOR OUTSTANDING EXPENSES

•Outstanding Expenses or Unpaid Expenses: These are the expenses that have been incurred during a particular trading period, but not paid by the end of that period.

GOODS TAKEN OVER BY PROPRIETOR FOR PERSONAL USE

When some of the stock is withdrawn from the business by the proprietor for his personal use, the cost of such goods will be deducted from the purchases and will be added with the drawings of the proprietor.

GOODS DISTRIBUTED AS FREE SAMPLES

This is one kind of advertisement. When goods are distributed to the prospective customers as free samples, an expense is incurred (known as advertisement expense) and there is an usual reduction from the stock of goods.