Adjustment at the beginning of the year

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Daya

Daya (Querist)
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31 October 2024 what type of expenses or income adjusted at the beginning of the Financial year.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 November 2024 At the beginning of a financial year, the following expenses and income are generally adjusted:
Expenses:
Depreciation: Adjusted for the previous year's depreciation expense to reflect the current year's depreciation.
Amortization: Adjusted for the previous year's amortization expense to reflect the current year's amortization.
Accruals: Adjusted for expenses that were accrued in the previous year but not paid until the current year.
Prepayments: Adjusted for expenses that were prepaid in the previous year but not fully utilized until the current year.
Income:
Accrued income: Adjusted for income that was earned in the previous year but not received until the current year.
Unearned income: Adjusted for income that was received in advance in the previous year but not fully earned until the current year.
Deferred income: Adjusted for income that was deferred from the previous year to the current year.
Additionally, the following accounts are also adjusted at the beginning of the financial year:
Opening balances: The opening balances of various accounts such as assets, liabilities, and equity are adjusted to reflect the current year's starting position.
Provisions: Adjusted for provisions made in the previous year that need to be carried forward to the current year.
Please note that these are general adjustments and may vary depending on the specific accounting standards followed by a company.