Accumulated earnings describes those earnings which have actually been made by the company in the existing accounting duration however have actually not been gotten yet. Such kinds of earnings can be Interest on loan, lease gotten, commission, and so on. So, following the accrual idea of accounting, these earnings are taped in the year in which they are rendered by the company and dealt with as an earnings for the company.
Change:
A. If Accumulated Earnings is offered outside the trial balance: In such case, 2 entries will be passed:
- Will be contributed to the associated Earnings A/c in the Cr. side of Earnings & & Loss A/c.
- Will be displayed in the Assets side of the Balance Sheet or contributed to the worried source in the Assets side of the Balance Sheet.
B. If Accumulated Earnings is offered inside the trial balance: It will just be revealed on the Assets side of the Balance Sheet.
Illustration:
The Trial Balance of Ms. Samriti for the year ended March 31 2023, looks like follows:
The following modifications were kept in mind on that date:
1. Commission totaling up to 1,500 is still to be gotten.
2. Quantity of Closing stock on 31st March 2022 was 15,000.
3. Impressive earnings totaling up to 500.
4. Wage paid ahead of time amounting to 5,000.
5. Lease got ahead of time total up to 3,000.
Prepare Trading and Earnings and Loss A/c and balance sheet after taking the following modifications into factor to consider.
Option:
