a. Prepare a single-column revenue journal to record these transactions. Enter transactions in chronological order.
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.
Revenue and Cash Receipts Journals
Lasting Summer Inc. has $2,360 in the October 1 balance of the
| Oct. 3. | Issued Invoice No. 622 for services provided to Palace Corp., $2,480. | |
| 5. | Received cash from Champion Co., on account, for $1,090. | |
| 8. | Issued Invoice No. 623 for services provided to Sunny Style Inc., $4,270. | |
| 12. | Received cash from Wayfarer Co., on account, for $1,270. | |
| 18. | Issued Invoice No. 624 for services provided to Amex Services Inc., $3,000. | |
| 23. | Received cash from Palace Corp. for Invoice No. 622 of October 3. | |
| 28. | Issued Invoice No. 625 to Wayfarer Co., on account, for $2,530. | |
| 30. | Received cash from Rogers Co. for services provided, $90. |
a. Prepare a single-column revenue journal to record these transactions. Enter transactions in chronological order.
| REVENUE JOURNAL | PAGE 19 | |||
DATE |
Invoice No. |
Account Debited |
Post. Ref. |
Accounts Rec. Dr. Fees Earned Cr. |
| 20Y5 | ||||
| ✔ | ||||
| ✔ | ||||
| ✔ | ||||
| ✔ | ||||
| Total |
Prepare a cash receipts journal to record these transactions.
If an amount box does not require an entry, leave it blank.
| CASH RECEIPTS JOURNAL | PAGE 25 | ||||
| DATE | Account Credited | Post. Ref. | Fees Earned Cr. | Accounts Rec. Cr. | Cash Dr. |
| 20Y5 | |||||
| ✔ | |||||
| ✔ | |||||
| ✔ | |||||
| Oct. 31 | Total |
b. Prepare a listing of the accounts receivable customer balances and verify that the total of the accounts receivable customer balances equals the balance of the accounts receivable controlling account on October 31, 20Y5.
| Lasting Summer Inc. | |
| Accounts Receivable Customer Balances | |
| October 31, 20Y5 | |
| Amex Services Inc. | $ |
| Sunny Style Inc. | |
| Wayfarer Co. | |
| Total accounts receivable | $ |
c. Lasting Summer Inc. uses a subsidiary ledger for accounts receivable for all of the following reasons EXCEPT:
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