journals
Primble
Registered Posts: 734 Epic contributor 🐘
Hi
i'm having a dumb day and cant work these journals out
if there is an increase in inventories is it dr inventories
cr bank (even though it's an overdraft)
decided to raise a provision of doubtful receivables is it dr receivables
cr provision of doubtful receivables
taxation provision
dr bank
cr tax
depreciation to be apportioned
dr cost
cr depreciation
accruals and prepayment
dr expense
cr accruals
cr expense
dr prepayments
i'm probably really muddled but i find it hard to remember what my debits and credits are
i'm having a dumb day and cant work these journals out
if there is an increase in inventories is it dr inventories
cr bank (even though it's an overdraft)
decided to raise a provision of doubtful receivables is it dr receivables
cr provision of doubtful receivables
taxation provision
dr bank
cr tax
depreciation to be apportioned
dr cost
cr depreciation
accruals and prepayment
dr expense
cr accruals
cr expense
dr prepayments
i'm probably really muddled but i find it hard to remember what my debits and credits are
0
Comments
-
Hi,
Your inventories journal could be cr bank/cash if it is a cash purchase. If the purchases are made on credit it will be credit trade payables (creditors). When payment is made it will then be credit bank debit trade payables.
A bad debt provision will be credit bad debt provisions in the balance sheet (under trade receivables) and debit bad debt provisions in the income statement. By doing this you are reducing the value of the trade receivables in the balance sheet and increasing the provision for expected bad debts cost in the income statement.
The tax provision is credit income tax liability in the balance sheet debt income tax expense in the income statement. When the tax provision is paid it will be credit bank, debit income tax liability in the balance sheet as the provision has now been paid.
Your accruals and prepayments are fine.
I think a lot of students tend to use mnemonics such as PEARLS or DEADCLIC to help them with debits and credits.
Purchases )
Expenses ) debit
Assets.....)
Revenue )
Liabilities ) credit
Sales......)
regards
Steve0
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