1. Prepare Income Statement and Balance Sheet dated 31 July 2022 by using the following accounts. The values are stated monthly basis. Please make sure you properly follow the classification shown in the class.. Account Cash Car Insurance Rent Amount in CAD Account Salary Car Utility Expense 3000 450 1600 Phone 700 Credit Card Debt 300 Car Loan 4500 Entertainment Expense 100 Phone Bill (Same 30 Every Month) Investment in Bond 200 Net Worth. 3380 50 Transportation Expense 200 300 50 Borrowed from friends 200 for 6 months Tuition Income Child Benefit Wifi Bill Amount in CAD 5000 9000 Vacation to Mexico Study Loan 300 600 2000
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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