Question -
Answer -
(i) Prepaid expenses
(a) When given inside theTrial Balance: It will be addedin the asset side of the Balance Sheet only.
| Balance Sheet |
| Assets | | Amount |
| Prepaid Expenses | | |
| | |
| | |
(b) When given outside theTrial Balance: It will beposted in the P & L account as well as Balance Sheet
| Dr. | | Cr. | | |
| Particulars | Amount | Particulars | Amount | | Liabilities | Amount | Assets | Amount |
| Concerned Expenses | | | | | | | Prepaid Expenses | |
| Less: Prepaid Expenses | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | |
| | | | | | | | | | | |
| Balance Sheet |
| Assets | | Amount |
| Prepaid Expenses | | |
| | |
| | |
| | | | | | | | | | | | | | |
(ii) Depreciation
In trial balancedepreciation is shown in P & L account as it is an expense. When present intrial balance it means deduction has taken from concerned asset, whendepreciation is shown outside trial balance, then it needs to be recorded bothin P & L account as well as balance sheet.
1)Inside Trial Balance
| Profit and Loss Account |
| Dr. | | Cr. |
| Particulars | Amount | Particulars | Amount |
| Depreciation | | | |
| | | |
| | | |
| | | |
| | | |
| | | | |
2)Outside Trial Balance
| Dr. | | Cr. | | |
| Particulars | Amount | Particulars | Amount | | Liabilities | Amount | Assets | Amount |
| Depreciation on Concerned Assets | | | | | | | Concerned Assets | |
| | | | | | | | Less: Depreciation | |
| | | | | | | | | |
| | | | | | | | |
| | | | | | | | | | |
(iii) Closing stock
(a) Closing stock isvalued based on the least among cost price or realisble value. If present inTrial Balance, posted only in Assets side of Balance Sheet.
| Balance Sheet | | |
| Liabilities | Amount | Assets | Amount | | |
| | | | | |
| | Closing Stock | | | |
| | | | | |
(b) When closing stockis given outside trial balance, it gets posted in two places i.e. P & Laccount and Balance Sheet
| Dr. | | Cr. | | |
| Particulars | Amount | Gains/Revenue | Amount | | Liabilities | Amount | Assets | Amount |
| | Closing Stock | | | | | | |
| | | | | | | Closing Stock | |
| | | | | | | | |
| | | | | | | | | |