Statement of Adjusted Profit

Step 1: Complete correction journal entries.

Refer to Correction Journal Entries recordings if you are unsure how to do so.

Step 2: Look for Income and Expense accounts in correction journal entries.

Since Profit = Income - Expense

If in correction journal entries:

• Dr Expense = More Expense = Less Profit

• Cr Expense = Less Expense = More Profit

• Dr Income = Less Income = Less Profit

• Cr Income = More Income = More Profit

Step 3: Prepare the Statement of Adjusted Profit according to the format shown in the recording (3:56).