a. Depreciation on the building for the year is $6,200. b. Prepaid Insurance had a $3,200 debit balance at December 31 before adjusting for the costs of any expired coverage. A review shows that $1,200 of unexpired insurance coverage remains at year-end. c. Received $6,600 cash in advance from a client for services not yet performed. As of December 31, one-third of the work had been performed. d. As of December 31, salaries expense of $2,400 has been incurred but not yet paid. e. As of December 31, the company has earned, but not yet recorded, $520 of interest revenue. The interest revenue will be received in cash next year. For each of the separate cases, determine the financial statement impact of each required year-end adjusting entry. Fill in the table by indicating the amount and direction ((+) increase or (-) decrease) of the effect. CANON C. d. e. Net Income Total Assets Total Liabilities Total Equity
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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a. Depreciation on the building for the year is $6,200.
b. Prepaid Insurance had a $3,200 debit balance at December 31 before adjusting for the costs of any expired coverage. A review
shows that $1,200 of unexpired insurance coverage remains at year-end.
c. Received $6,600 cash in advance from a client for services not yet performed. As of December 31, one-third of the work had been
performed.
d. As of December 31, salaries expense of $2,400 has been incurred but not yet paid.
As of December 31, the company has earned, but not yet recorded, $520 of interest revenue. The interest revenue will be received
in cash next year.
For each of the separate cases, determine the financial statement impact of each required year-end adjusting entry. Fill in the table by
indicating the amount and direction ((+) increase or (-) decrease) of the effect.
a.
b.
C.
d.
e.
Net Income
Total Assets
Total Liabilities
Total Equity"
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