(Write at least 7 to 10 lines) 1. Why is it necessary to record the adjusting entries in the preparation of final accounts? 2. What is meant by closing stock? Show its treatment in final accounts?

3. State the meaning of: (a) Outstanding expenses: (b) Prepaid expenses; (c) Income received in advance: (d) Accrued income 4. Why is it necessary to create a provision for doubtful debts at the time of preparation of final accounts?

5. What adjusting entries would you record for the following: (a) Depreciation (b) Discount on debtors (c) Interest on capital (d) Managers commission