QUESTION THREE The following transactions were extracted from the books Egyakoo Ltd for the month of August 2018. Show the effect of the transactions on the accounting equation of Egyakoo Ltd. I. Alaska the owner of Egyakoo Ltd contributed an amount of GHS100,000 by cheque representing 10,000 equity shares, IL Acquired factory building on credit from Lilwin enterprise for GHS50,000 IL Acquired a loan of GHS48,000 from Womenzgold Ltd by cheque IV. Purchased goods for resale on credit, GHS250,000 from "Too-Much" Enterprise V. Paid for repairs and maintenance of GHS2,080 from bank VI. Goods worth GHS98,000 sold on credit for GHS105,000 to Baby Jackson Ltd VII, Goods worth GHS5,350 returned to "Too-Much" Enterprise a supplier VIII. Alaska thc owner of Agya Koo Itd. GHS28,000 from the company to buy a jeep for Ajara Mapuka for giving birth to junior Alaska. IX. The company received interest of GHS5,200 on its mobile money wallet account from MTN X. Purchased a special machine for the production of a specialized design on its product to it niche market at a cost of GHS13,250 on credit from McBrown Ltd.
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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