CAT / FIA FFA Syllabus E. Preparing A Trial Balance - Impact of errors - Notes 4 / 4
When errors are corrected they may affect the business' profit for the year figure. In order to find the correct figure for profit, a statement of adjustments to profit has to be prepared.
Proforma – Statement of Adjustment to Profit
$ | $ | $ | |
+ | - | ||
original profit | x | ||
adjustment: | |||
over depreciation expense charged | x | ||
unrecorded expense | x | ||
unrecorded sale | x | ||
---- | ---- | ||
x | (x) | x | |
---- | |||
adjusted profit | x | ||
=== |
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Journal entries to correct errors
Syllabus E. Preparing A Trial Balance
E2. Correction of errors
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Purpose of control accounts
Syllabus E. Preparing A Trial Balance
E3. Control accounts and reconciliations