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Video instructions and help with filling out and completing What Form 8815 Prepaid

Instructions and Help about What Form 8815 Prepaid

Students this is second adjustment in fine lagoons that is outstanding expenses trial balance show salary paid rupees fifty thousand adjustment says salary for the March 2022 was not paid the amount of rupees five thousand servants this is the concept with which we have introduced the concept of adjustment so the concept should be simple for you this outstanding expenses should be accounted because of one fundamental concept called accrual concept so what is that accrual concept says if in the accounting period if certain expenditures have been incurred whether they are paid or not okay whether they are paid or not if it is incurred if it is incurred then it should be accounted because the question of payment on time or not is a matter of cash flow management if you have cash you will pay if you don't have cash you will pay in future date but the point is when this expenditure was incurred so the salary which is incurred but not paid is an expenditure for that accounting period let whenever it be paid but the point is when it was incurred in that particular point of time it should be accounted so what is going to be the accounting effect for this adjustment will write see the salary for one full year or salary paid by the company till that date was fifty thousand so salary paid is fifty thousand whereas unpaid salary is how much five thousand so the actual salary expense for the company is how much fifty five thousand so only when the company show this entire 55,000 has salary in P&L it will reflect true and fair view otherwise it will not reflect the true and fair view so when P&L is prepared then profit and loss account is...

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