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Unformatted text preview: recorded. Deferrals which were amounts that have now been earned. Now for example Dr. Closing stock, Cr Manufacturing P & L a/c b) Dr Depreciation (Mfg P & L a/c) Cr plant and Machinery c) Dr. Wages (Mfg P & L a/c) Cr Account payable (if paid in arrears) d) Dr Prepaid exps Cr Freight (if paid in advance). Next, Ill describe how the entries would be recorded in a computerized accounting system, well go into the general journal and enter the transactions and luckily you dont have to do this by hand due to all the different software out there and QuickBooks is one of the top software to use. The ethical issue is to always make sure you are reducing the prepaid assets (and 2 increasing the expenses). And the other would be to make sure to include all liabilities (and expenses). References: https://mycampus.aiu-online.com/courses/ACCT205/u2/hub1/hub.html 3...
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- Spring '10