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.It is acceptable that some adjusting entries contain estimated amounts. A) True B) False
100% TRUE
It depends, if no other basis such as actuals are not available in that case estimates can be used.
But adjustment entries normally impacting P&L will require the approval from Finance cotrollar if amount is huge, which will require all supporting calculation and at that time estimates cannot be used.
Its TURE100 % and we must say the reason for that in any accounting division ( AP / AR / Bk / Invt. / GL ) you need sometimes to make estimated BUT that MUST be according to the history for the transaction you will make and from where you can reach up for accurate estimated value and not a fake and un accuarte value , You MUST be expert in the division you work in order to make the call of that , But your Manager MUST know as well for it in order if your estimated is up or down a little .
Adjusting entries might be used to correct previously used estimated amounts. You wouldn't normally adjust an actual amount with an estimated one. On the other hand, you wouldn't adjust an estimated amount with another estimated amount.
yes entries are based upon some estimation just like deperciation.
but at the time of adjusting these are actal and ussually
not revisions of estimates.
So correct Answer is
B)False
False
true i think mostly adjustments are on estimate bases
Adjusting enteries are made to actualize the estimates and post the differences, show true and fair view of the statements
Sure true
Yes it is true it is possible to post entries on the basis of Estimation.In India Accounting Standard4 and5 deals with the same.
Eg Provisions for Doubtfull debts,DEpreciation etc.
