Final entries (closing entry) in Tally ERP 9

Sunil Bhave

June 30, 2013

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Adjustment Items : I) To Provide for outstanding Expenses
Adjustment Entries : Expenses account (concerned) (a) Dr
To Outstanding expenses account (b)
Effect to be shown in
Profit & Loss a/c : (a) Debit side as an addition to the concerned a/c
Balance sheet : (b) Liabilities Side

Adjustment Items : II) To Adjust Prepaid expenses
Adjustment Entries : Prepaid Expenses account (a) Dr
To Expenses account (concerned) (b)
Effect to be shown in
Profit & Loss a/c : (a) Debit side as deduction from the concerned exp.a/c
Balance sheet : (b) Asset Side

Adjustment Items : III) To Adjust Income Earned but not received
Adjustment Entries : Outstanding Income account (a) Dr
To Income account (concerned) (b)
Effect to be shown in
Profit & Loss a/c : (b) credit side as and addition to the concerned Income a/c
Balance sheet : (a) Asset Side

Adjustment Items : IV) To Adjust Income Received in Advance
Adjustment Entries : Income account (concerned) (a) Dr
To Income received in advance account (b)
Effect to be shown in
Profit & Loss a/c : (a) credit side as deduction addition from income a/c concerned
Balance sheet : (b) Liabilities Side

Adjustment Items : V) To Write off Bad Debt
Adjustment Entries : Bad Debt A/c (a) Dr
To Debtors account (b)
Effect to be shown in
Profit & Loss a/c : (a) Debit side
Balance sheet : (b) Asset Side, as a deduction from sundry debtors

Adjustment Items : VI) To Provide for Doubtful Debt
Adjustment Entries : Profit and Loss A/c (a) Dr
To Reserve for Doubtful Debt A/c (b)
Effect to be shown in
Profit & Loss a/c : (a) Debit side
Balance sheet : (b) Asset Side, as a deduction from sundry debtors

Adjustment Items : VII) To Provide for Discount on Debtors
Adjustment Entries : Profit and Loss A/c (a) Dr
To Reserve for Doubtful Debt A/c (b)
Effect to be shown in
Profit & Loss a/c : (a) Debit side
Balance sheet : (b) Asset Side, as a deduction from sundry debtors

Adjustment Items : VIII) To Provide for Discount on Creditors
Adjustment Entries : Reserve for Discount on Creditors A/c (a) Dr
To Profit and Loss A/c (b)
Effect to be shown in
Profit & Loss a/c : (a) Credit side
Balance sheet : (b) Liabilities Side, as a deduction from Sundry Creditors

Adjustment Items : IX) To Provide for Depreciation on a permanent asset
Adjustment Entries : Depreciation A/c (a) Dr
To (concerned) Asset A/c (b)
Effect to be shown in
Profit & Loss a/c : (a) Debit side
Balance sheet : (b) Asset Side, as a deduction from the concerned assets.

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Adjustment Items : X) To adjust interest on Proprietor’s Capital
Adjustment Entries : Interest on Capital A/c (a) Dr
To Capital A/c (b)
Effect to be shown in
Profit & Loss a/c : (a) Debit side
Balance sheet : (b) Liabilities Side, as addition to Capital

Adjustment Items : XI) To adjust interest on Drawings
Adjustment Entries : Capital A/c (a) Dr
To Interest on Drawing A/c (b)
Effect to be shown in
Profit & Loss a/c : (a) Credit side
Balance sheet : (b) Liabilities Side, as deduction from Capital

Adjustment Items : XII) For Goods used as free samples
Adjustment Entries : Free Samples A/c (a) Dr
To Purchases A/c (b)
Effect to be shown in
Profit & Loss a/c : (a) Debit side
: (b) a deduction from Purchase A/c in the Trading A/c.

Adjustment Items : XIII) Goods used as statonery in office
Adjustment Entries : Printing and Stationery A/c (a) Dr
To Purchases A/c (b)
Effect to be shown in
Profit & Loss a/c : (a) Debit side of profit & loss A/c
: (b) a deduction from Purchases in the Trading A/c.

Adjustment Items : XIV) Loss of stock by fire etc. insured and claim admitted
Adjustment Entries : Insurance Claim A/c (a) Dr
To Trading A/c (b)
Effect to be shown in
Profit & Loss a/c : (b) Credit Side of Trading A/c
Balance sheet : (a) Asset side as Insurance Claim

Adjustment Items : XV) Loss of stock partially insured and admitted by insurance Co.
Adjustment Entries : Insurance Claim A/c (a) Dr
Loss by fire A/c (b) Dr
To Trading A/c (c)
Effect to be shown in
Profit & Loss a/c : (b) Debit Side of Profit & Loss A/c
(c) Credit Side of the Trading A/c.
Balance sheet : (a) Insurance Claim on the Asset side

Adjustment Items : XVI) Loss of stock by fire uninsured
Adjustment Entries : Loss by fire A/c (a) Dr
To Trading A/c (c)
Effect to be shown in
Profit & Loss a/c : (b) Debit Side of Profit & Loss A/c
(c) Credit Side of the Trading A/c.

Basic Rules of Data Entry in Tally ERP9

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