20X2 20X1 20X0 Adjusted TB Adjusted TB Adjusted TB Account DR CR DR CR DR CR Cash Accounts Receivable Enventory Prepaid expense Fixed Assets AD Current portion of LTD Accounts Payable 50,000 s0,000 85,900 25,000 58,100 7,500 1,500 2,500 4,000 2,000 1,000 3,000 220,000 110,000 100,000 20,000 10,000 2,500 15,000 80 10,000 10,000 5,000 7,200 1,200 Accrued Expense Deferred revenue 4,000 3,000 2,000 3,000 4,000 60,000 1,500 98,500 Note Payable 45,000 70,000 1,500 98,500 56,100 Common Stock 1,500 APIC Retained eamings Sales Phone Sales 98,500 5,200 225,000 125,000 10,000 5,000 2,500 1,000 Cost of Goods Sold 150,600 50,000 80 Depreciation expense 5,000 14,200 80 Insurance 10,000 5,000 3,000 Interest 1,500 5,000 Property tax 2,500 2,400 1,200 469 600 469 600 328 700 328 700 204 200 204 200
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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