Adjustments to Final Accounts

Match each depreciation method with its correct operational characterization or calculation basis.

On 1 January 2025, the Telephone Expense Account of a trading enterprise showed an accrued balance of $\text{₦}6,500$. During the year ended 31 December 2025, total cash paid for telephone bills was $\text{₦}92,000$. At 31 December 2025, telephone bills owing amounted to $\text{₦}9,000$, while prepaid telephone bills amounted to $\text{₦}4,500$. What amount should be charged to the Profit and Loss Account for telephone expense for the year ended 31 December 2025?

A trader received $₦120,000$ cash as rent from subletting part of his warehouse during the financial year ended 31 December 2025. On 1 January 2025, rent received in advance was $₦15,000$. At 31 December 2025, rent accrued was $₦18,000$ while rent received in advance was $₦10,000$. What is the amount of rent income to be credited to the Profit and Loss Account for the year?

Ade & Sons Enterprises extracted a trial balance at 31 December 2025 showing a Trade Debtors balance of $\text{₦}520,000$. At year-end, additional bad debts of $\text{₦}32,000$ were identified to be written off. Furthermore, a customer whose debt of $\text{₦}18,000$ was written off in 2024 paid the full amount during the year; the cash received was correctly entered in the cash book but incorrectly credited directly to the Trade Debtors control account instead of the Bad Debts Recovered account. What is the corrected Trade Debtors balance to be shown in the Statement of Financial Position at 31 December 2025?

On 1 January 2023, Calabar Haulage Enterprise purchased a delivery van for $₦6,000,000$. Depreciation is charged at $20\%$ per annum using the reducing balance method. What is the journal entry required to record the depreciation expense for the year ended 31 December 2024?

A sole trader's draft Trading Account reported total Purchases of ₦540,000 and a Gross Profit of ₦210,000 at year-end. However, audit records revealed that the proprietor had taken goods costing ₦35,000 (with a retail selling price of ₦50,000) for personal family use, which had not yet been recorded in the accounting records. What are the corrected figures for total Purchases and Gross Profit after making the necessary adjustment?

At 1st January 2025, Obi Stores maintained a Provision for Doubtful Debts balance of $\text{₦}42,000$. On 31st December 2025, the Total Trade Debtors balance stood at $\text{₦}960,000$ before adjustments. The following financial events occurred at year-end:

(i) A debt of $\text{₦}40,000$ owed by Okon is to be written off as irrecoverable.
(ii) A cash recovery of $\text{₦}18,000$ was received from Musa in respect of a debt previously written off in 2023. The transaction was correctly recorded in the cash book but mistakenly credited to the Bad Debts Written Off account.
(iii) Provision for doubtful debts is to be adjusted to $5\%$ of net trade debtors.

What is the net amount to be charged as an expense to the Profit and Loss Account for the year ended 31st December 2025 in respect of bad debts written off, bad debts recovered, and provision for doubtful debts?

Kofi Traders recovered a debt of $\text{₦}25,000$ that had previously been written off as irrecoverable in a prior financial period. What is the correct accounting entry required to reinstate the debtor's account before recording the receipt of cash?

On 1 January 2023, Ibadan Logistics Enterprise acquired plant machinery costing $₦10,000,000$. The policy of the enterprise is to provide for depreciation at a rate of $20\%$ per annum using the reducing balance method. Calculate the credit balance of the Provision for Depreciation Account as at 31 December 2024.

Match each depreciation method with its corresponding operational description or formula basis.

At 31st December 2024, the books of Folake Trading Enterprise showed Trade Receivables of $\text{₦}120,000$ and an existing Provision for Doubtful Debts of $\text{₦}4,500$. An additional bad debt of $\text{₦}8,000$ was discovered and is to be written off before creating a $5\%$ provision for doubtful debts on the remaining receivables. What amount (in Naira) should be charged to the Profit and Loss Account as the provision for doubtful debts for the year?

On 1 January 2024, Aba Commercial Ventures had a Machinery account balance at cost of $₦8,000,000$ and a Provision for Depreciation on Machinery credit balance of $₦1,200,000$. Depreciation is charged annually at $15\%$ using the reducing balance method. What is the total balance of the Provision for Depreciation on Machinery account to be carried forward as at 31 December 2024?

On 31st December 2025, Folake Enterprises extracted a trial balance showing Trade Receivables of $\text{��}145,000$ and an existing Provision for Doubtful Debts of $\text{₦}4,800$. During the year-end audit, it was discovered that a bad debt recovery of $\text{₦}2,500$ was erroneously credited to the Trade Receivables account. Additionally, further bad debts of $\text{₦}5,000$ are to be written off. A specific provision of $\text{₦}4,000$ is required for a customer in liquidation, while a general provision of $5\%$ is to be maintained on the remaining trade receivables. Calculate the net amount in Naira ($\text{₦}$) to be charged as Provision for Doubtful Debts in the Income Statement for the year ended 31st December 2025.

Bisi Traders has Trade Debtors of $\text{₦}40,000$ and a Provision for Doubtful Debts of $\text{₦}2,000$. If the business decides to create a $5\%$ Provision for Discount on Debtors, what is the amount of the provision for discount on debtors?

At the end of the financial year, Kalu Traders has Trade Debtors of $\text{₦}75,000$ and an existing Provision for Doubtful Debts of $\text{₦}1,500$. If bad debts of $\text{₦}5,000$ are written off and the provision for doubtful debts is to be adjusted to $5\%$ of the remaining debtors, what amount (in $\text{₦}$) will be charged to the Profit and Loss Account for provision for doubtful debts?

The trial balance of OLUWA & Sons Trading Enterprise as at 31st December 2025 shows Trade Debtors of $\text{₦}250,000$ and an existing Provision for Discount on Debtors of $\text{₦}3,500$. Additional information reveals that bad debts of $\text{₦}10,000$ are to be written off, a provision for doubtful debts is to be maintained at $5\%$ on net debtors, and a provision for discount on debtors is to be created at $2\%$. What is the amount to be charged to the Profit and Loss Account as provision for discount on debtors for the year?

Match each accounting transaction or statement item regarding depreciation with its corresponding ledger entry or financial statement treatment.

Complete the statement describing the standard double-entry bookkeeping procedure for writing off an irrecoverable debt.

Zainab Retail Outlets extracted a Trade Debtors balance of $\text{₦}100,000$ at the end of the financial year. The business policy requires writing off bad debts of $\text{₦}10,000$, maintaining a provision for doubtful debts at $5\%$ on net debtors, and creating a $2\%$ provision for discount on debtors. What is the amount of the provision for discount on debtors to be recognized?

At 31st December 2025, the trial balance of Adebayo Trading Store showed Trade Receivables of $\text{₦}180,000$ and an existing Provision for Doubtful Debts credit balance of $\text{₦}11,000$. At year end, an additional bad debt of $\text{₦}20,000$ is to be written off. A specific provision of $\text{₦}10,000$ is required for an insolvent debtor, and a general provision of $5\%$ is to be maintained on the remaining trade receivables. What is the net amount to be charged to the Profit and Loss Account as an increase in the provision for doubtful debts for the year?