4. Sales Revenue and Service Revenue are two income statement accounts that relate to Accounts Receivable. Name two other accounts related to Accounts Receivable and Notes Receivable that would be reported on the income statement and indicate whether each would appear before, or after, Income from Operations. Web Wizard would report Income from Operations. Income from Operations.
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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Web Wizard, Inc., has provided information technology services for several years. For the first two months of the current
year, the company has used the percentage of credit sales method to estimate bad debts. At the end of the first quarter,
the company switched to the aging of accounts receivable method. The company entered into the following partial list of
transactions during the first quarter.
a. During January, the company provided services for $38,000 on credit.
b. On January 31, the company estimated bad debts using 1 percent of credit sales.
c. On February 4, the company collected $19,000 of accounts receivable.
d. On February 15, the company wrote off a $100 account receivable.
e. During February, the company provided services for $28,000 on credit.
f. On February 28, the company estimated bad debts using 1 percent of credit sales.
g. On March 1, the company loaned $2,400 to an employee, who signed a 6% note, due in 6 months.
h. On March 15, the company collected $100 on the account written off one month earlier.
i. On March 31, the company accrued interest earned on the note.
j. On March 31, the company adjusted for uncollectible accounts, based on an aging analysis (below). Allowance for
Doubtful Accounts has an unadjusted credit balance of $1,180.
Number of Days Unpaid
Customer
Total
0-30
31-60
61-90
Over 90
Alabama Tourism
$
200
$
100
80
$
20
Bayside Bungalows
Others (not shown to save space)
Xciting Xcursions
$
1,000
380
380
16,600
6,600
8,200
800
400
400
$ 7,100
$ 8,280
15%
Total Accounts Receivable
$17,580
$ 1,020
$ 1,180
Estimated Uncollectible (%)
2%
20%
40%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd3da9567-c8e6-421d-9036-38d3212a2039%2Fae48bd0c-5cc8-47e7-a8e9-928a9b20f8a9%2Ftv9rd5_processed.png&w=3840&q=75)
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