In level two/intermediate, the issues of end of year adjustments were interrogated which entailed provision for doubtful debts, depreciation, prepayments and accruals for operating expenses and incomes. At that level, the focus was on intermediate aspects of those subject of discussion. In level three, further discussion has been considered on the same subject so as to provide the entrepreneur/learner with advanced insight on how to adjust accounts to cater for generally accepted accounting principles when preparing the final accounts of a bigger business.

In this chapter, the focus will be on detailed adjustment of operating expense, operating incomes, further consideration of depreciation and preparation of Properties Plants and Equipment (PPE) schedules. At this level, the trading account and provision for doubtful debts will not be considered as we did in the previous discussion for there are no further adjustments required except the ones discussed in level two. The entrepreneur also need to note at this point that the discussions will aid in dealing with handling of incomplete records using the missing item techniques. This calls for a better understanding of how the statement of financial position (balance sheet) items are treated in a new financial period. Therefore, at the end of this chapter, the learner will be able;