Account Title: Cash Date Dec 1 Dec 2 Particulars Capital Professional Fees Dec 8 Loan Payable Dec 31 Accounts Receivable Account Title: Accounts Receivable Particulars Date Dec 4 Professional Fees Account Title: Notes Receivable Date Dec 10 Particulars Professional Fees PR Debit P200,000 5,600 20,000 12,800 P238,400 PR Debit PR Debit P38,000 P38,000 P12,000 P12,000 Date Dec 1 Dec 1 Dec 1 Dec 2 Dec 3 Dec 15 Dec 15 Dec 31 Dec 31 Dec 31 Date Dec 31 Account No.: 101 Particulars Rent Expense Office Supplies Expense Office Equipment Furniture & Fixtures Accounts Payable Salaries Expense Account No.: 102 Date G.P's Drawings Taxes and Licenses Salaries Expense Accounts Payable By Balance Particulars Cash By Balance Account No.: 103 Particulars By Balance PR PR Credit P16,400 15,500 40,000 12,500 4,000 16,500 10,000 3,000 14,250 4,000 102,250 P238,400 Credit P12,800 25,200 P38,000 PR Credit P12,000 P12,000
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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