(a) On September 30, the firm received its utilities bill for the month of September amounting to P14,300. This remains to be unpaid at month-end. Record an adjustment for the utilities for the month of September. (b) On September 21, the firm received a 6% 90-day note for money lent to Ling Ying Wei amounting to P400,000. The remainder of the amount pertains to a 12-month 9% promissory note received on May 1, 2021. Record an adjustment for the accrued interest from both notes for the month of September. (c) On September 30, an inventory of Warehouse Supplies and Office Supplies showed that items costing P127,000 and P12,000 were on hand respectively. Record an adjustment for the supplies used in September. (d) On July 1, 2021, the firm purchased a six-month insurance policy for P232,000. Record an adjustment for the expired insurance in September. Round-off answer to the nearest peso. (e) On April 1, 2021, the firm purchased an equipment to be used in the warehouse for P200,000. The equipment was estimated to have a useful life of five years and a salvage value of 10% of cost. Record an adjustment for depreciation on the equipment for
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.
What is the adjusted
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