It was discovered thatin arriving at the profit for 2006 , the following two items have been ignored.
i) outstanding expenses of Rs.3500
ii) accrued interest on investment of Rs.2,000
make journal entries relevant to adjustments.
However, the treatment of above transactions is as follows.
|All Partners’ Capital A/c||Dr.||[In Old Ratio]|
|To Outstanding Expenses A/c|
|(Outstanding expenses recorded)|
|Accrued Interest A/c||Dr.|
|To All Partners’ Capital A/c||[In Old Ratio]|
|(Accrued Interest recorded)|
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