Enter the proposed adjusting entries as debit and credit lines with a reference. The tool checks that each entry balances, then shows the effect on profit and on net assets, with the entries management has declined to post shown separately against your materiality.
Type is one of Income, Expense, Asset, Liability or Equity. Lines with the same Ref form one entry. Status Waived means management has not agreed to post it.
Tax effects are not computed. Enter pre-tax figures or add tax lines yourself. Evaluating whether unposted entries matter, alone and together, is your judgement under the current standards.
| Ref | Description | Debit | Credit | Profit effect | Net assets effect | Check |
|---|---|---|---|---|---|---|
| AJE1 | Accrue unrecorded audit fee | 1,50,000 | 0 | -1,50,000 | 0 | Out by 1,50,000 |
| AJE2 | Write down obsolete stock | 4,20,000 | 0 | -4,20,000 | 0 | Out by 4,20,000 |
| AJE3 | Reverse revenue booked after year end | 3,10,000 | 0 | -3,10,000 | 0 | Out by 3,10,000 |
| AJE4 | Reclassify advance from customers | 90,000 | 0 | 0 | 90,000 | Out by 90,000 |
A negative profit effect reduces profit. Net assets effect is the change in assets less liabilities. An entry that does not balance has a missing or wrong line. The waived entries are larger than the materiality figure you entered. Consider them together with other uncorrected items.
A schedule of adjustments is only useful if each entry balances and the reader can see what it does to profit and to net assets. Showing the entries management will not post on their own line, against materiality, makes the conversation about them short and factual.
Lines with the same reference form one entry. The tool adds debits and credits for each entry and shows any difference.
Income and expense lines change profit: a credit raises it and a debit lowers it. Asset and liability lines change net assets: a debit to an asset or a liability raises net assets, and a credit lowers them.
Entries whose status you list as waived are totalled on their own and compared with the materiality figure you enter.
An audit fee of ₹1,50,000 was not accrued. The entry debits Audit fee expense and credits Accrued expenses.
