Africa Traders is a registered VAT vendor and uses a Periodic inventory system. Africa Traders buys and sells furnit
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.
Africa Traders is a registered VAT vendor and uses a Periodic inventory system. Africa Traders buys and sells furniture and equipment to customers for cash or on credit. On 15 February 2021, Africa Traders bought the following furniture and equipment from RG wholesalers on credit (for the purpose of being traded and some for purpose of being used in the business):
- 2 Desks, with a total value of R950 and were purchased for the purpose of being traded.
- 1 Table, with a total value of R9 000 and was purchased for the purpose of being used in the office.
- Office stationery, with a total value of R600.
- 3 Photocopying machinery, with a total value of R15 000 and were purchased for the purpose of being traded.
On 24 February 2021, All the above items were returned to RG Wholesalers and credit note number 5859 was received. All the above items are VAT exclusive and the VAT rate is 15% and RG Wholesalers is also a registered VAT Vendor.
Which of the following subsidiary journal of Africa Traders has been correctly updated after considering the above credit note received by Africa Traders?
SALES RETURNS JOURNAL – February 2021 SRJ1
|
Doc no |
Day |
Details |
Fol. |
VAT output |
Sales returns |
Trade receivables |
|
5859 |
24 |
RG Wholesalers: 2 Desks |
CL1 |
R142,50 |
R950 |
R1 092,50 |
|
5859 |
24 |
RG Wholesalers: 3 Photocopying machinery |
CL1 |
R2 250 |
R15 000 |
R17 250 |
|
5859 |
24 |
RG Wholesalers: Table |
CL1 |
R1 350 |
R9 000 |
R10 350 |
|
5859 |
24 |
RG Wholesalers: Stationery |
CL1 |
R90 |
R600 |
R690 |
PURCHASES RETURNS JOURNAL – February 2021 PRJ1
|
Doc no |
Day |
Details |
Fol. |
VAT input |
Purchases returns |
Trade payables |
|
5859 |
24 |
RG Wholesalers: 2 Desks |
CL1 |
R142,50 |
R950 |
R1 092,50 |
|
5859 |
24 |
RG wholesalers: 3 Photocopying machinery |
CL1 |
R2 250 |
R15 000 |
R17 250 |
PURCHASES RETURNS JOURNAL – February 2021 PRJ1
|
Doc no |
Day |
Details |
Fol. |
VAT input |
Inventory |
Trade payables |
|
5859 |
24 |
RG Wholesalers: 2 Desks |
CL1 |
R142,50 |
R950,00 |
R1 092,50 |
|
5859 |
24 |
RG Wholesalers: 3 Photocopying machinery |
CL1 |
R2 250,00 |
R15 000 |
R17 250 |
PURCHASES RETURNS JOURNAL – February 2021 PRJ1
|
Doc no |
Day |
Details |
Fol. |
VAT input |
Purchases returns |
Trade payables |
|
5859 |
24 |
RG Wholesalers: 2 Desks |
CL1 |
R142,50 |
R950 |
R1 092,50 |
|
5859 |
24 |
RG Wholesalers: 3 Photocopying machinery |
CL1 |
R2 250 |
R15 000 |
R17 250 |
|
5859 |
24 |
RG Wholesalers: Table |
CL1 |
R1 350 |
R9 000 |
R10 350 |
|
5859 |
24 |
RG Wholesalers: Stationery |
CL1 |
R90 |
R600 |
R690 |
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