When a balance sheet fails to tally during an exam, students waste 20 minutes frantically recalculating columns.
The 4 Most Common Overlooked Adjustments
- Closing Stock: Appears outside the trial balance and must be entered on both the Trading A/c credit side and Balance Sheet assets.
- Prepaid Insurance / Rent: Deducted from expense in P&L, entered as an asset in Balance Sheet.
- Depreciation: Debited in P&L, deducted from asset in Balance Sheet.
- Bad Debts & New Reserve: Calculated only on remaining debtors after deducting current bad debts.
