Hi I am a teacher of level 5 accounting and recently I came across an adjustment to final accounts that I wasn't sure of.

The adjustment reads as follows: A Christmas bonus of stock has been given to employees costing 1600. The closing stock figure is adjusted, but no other entry has been made in the accounts.

i am assuming that the closing stock has already been adjusted by the reading of the question. would this be right?

so i am wondering what do I have to record. do i reduce the purchases figure because the bonus was taken out of stock? or do i record it as an expense in the profit and loss account and put it in as a current liability in the balance sheet.

accteacher

can anyone at all help with with the above??