After several months of planning, Jasmine Worthy started a haircutting business called Expressions. Thefollowing events occurred during its first month of business.a. Aug. 1 Worthy invested $3,000 cash and $15,000 of equipment in Expressions.b. 2 Expressions paid $600 cash for furniture for the shop.c. 3 Expressions paid $500 cash to rent space in a strip mall for August.d. 4 Purchased $1,200 of equipment on credit for the shop (recorded as accounts payable).e. 15 Expressions opened for business on August 5. Cash received from haircutting services in thefirst week and a half of business (ended August 15) was $825.f. 16 Expressions provided $100 of haircutting services on credit.g. 17 Expressions received a $100 check for services previously rendered on credit.h. 18 Expressions paid $125 cash to an assistant for hours worked for the grand opening.i. 31 Cash received from services provided during the second half of August was $930.j. 31 Expressions paid $400 cash toward the accounts payable entered into on August 4.k. 31 Worthy made a $900 cash withdrawal from Expressions for personal use. Arrange the following asset, liability, and equity titles in a table similar to the one in Exhibit 1.9: Cash; Accounts Receivable; Furniture; Store Equipment; Accounts Payable; J. Worthy, Capital; J. Worthy, Withdrawals; Revenues; and Expenses. Show the effects of each transaction using the accounting equation.
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.
After several months of planning, Jasmine Worthy started a haircutting business called Expressions. The
following events occurred during its first month of business.
a. Aug. 1 Worthy invested $3,000 cash and $15,000 of equipment in Expressions.
b. 2 Expressions paid $600 cash for furniture for the shop.
c. 3 Expressions paid $500 cash to rent space in a strip mall for August.
d. 4 Purchased $1,200 of equipment on credit for the shop (recorded as accounts payable).
e. 15 Expressions opened for business on August 5. Cash received from haircutting services in the
first week and a half of business (ended August 15) was $825.
f. 16 Expressions provided $100 of haircutting services on credit.
g. 17 Expressions received a $100 check for services previously rendered on credit.
h. 18 Expressions paid $125 cash to an assistant for hours worked for the grand opening.
i. 31 Cash received from services provided during the second half of August was $930.
j. 31 Expressions paid $400 cash toward the accounts payable entered into on August 4.
k. 31 Worthy made a $900 cash withdrawal from Expressions for personal use. Arrange the following asset, liability, and equity titles in a table similar to the one in Exhibit 1.9: Cash;
Withdrawals; Revenues; and Expenses. Show the effects of each transaction using the
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