POA lesson with Question and answer

 In the part of the blog, I will show you how the whole statement of financial position and performance look like with all the adjustment on prepayment, accrual and impairment loss on Trade receivable.  Question Step 1 : Do all the adjustment for the additional information Item (1) : Dr drawings Cr Inventory  ie Drawings (+) and Inventory (-) Item (2) : Dr Commission received  Cr Commission received in advance                 ie, Commission received (-) Item (3) : Dr Prepaid Utilities Cr Utilities expenses              ie, Utilities expenses (-) Note : commission received in advance will appear in the Financial position as CL            Prepaid Utilities will appear in the Financial position as CA Item (4) Dr Bank Loan Cr Current Portion of Long Term borrowing          ie, Bank loan (-)  Current portion of Long Term borrowing will appear in the Financial position as CL Item (5) :Dr Allowance for impairment loss on Trade receivable Cr Trade Receivable       ie, Allowance for impairment