ADJUSTED TB BALANCE SHEET CREDIT UNADJUSTED TB ADJUSTMENT INCOME STATEMENT ACCOUNT TITLE DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT Cash Accounts Receivable 30,000 30,000 12,000 12,000 Allowance for Bad Debt 500 (2) 100 600 Notes Receivable 6,000 40,000 6,000 40,000 60.000 200 Inventory opening Inventory closing Store supplies Inventory Furniture & Fixture Accumulated Depreciation Accounts Payable Notes Payable Castro Capital Castro Drawings Sales Sales Discount Sales Return & Allowances Purchases Freight in Purchase Discount (1) 60,000 600 (4) 400 60,000 60,000 (3) 6,000 3,000 12,000 10,000 74,900 9,000 12,000 10,000 74,900 2,000 2,000 300,000 300,000 1,000 2.000 1,000 2.000 (1) 60,000 200,000 5,000 140,000 5,000 2,000 4,000 2,000 4,000 Purchase Return & Allowances Advertising Expenses Salaries Expenses Utilities Expenses Interest Income Interest Expenses Bad Debt Expenses Depreciation Expenses Store Supplies Expenses Interest Receivable Accrued Salary 4,000 38,000 6,000 4,000 48,000 6,000 (6) 10,000 600 (5)(7) 340 940 400 400 (2) 100 |(3) 6,000 |(4) 400 |(5)(7) 340 100 6,000 400 340 (6) 10,000 10,000 423,440 ТOTAL Profit 407,000 407,000 423,440
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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