CBSE Class 12-commerce Answered

The concept of past adjustments is one of the easiest and the most important topics to be tested for in the final examinations. These questions relate to adjustments that are to made on account of some errors or omissions that were detected after closure of final accounts of the Partnership. The easiest way to attempt these questions is through Analytical table where adjustments would be done for wrong entry or omitted entry.

Steps:

1) Draw an analytical table with Debit and Credit Columns for all the partners and the total

2) Credit the omitted interest on capital to respective Partners' Capital or Current Account and total of the same is entered in the Debit Column

3) Debit interest on drawings omitted to be entered and credit the total to the total column.

4) Pass similar adjustment entries for all incomes and expenses

5) Compute the Balance and distribute in the Profit Sharing Ratio

6) The Net balance at the end disclosed by the individual partners' capital account would be entered in the books of account in form of an adjustment entry. 

 

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