Balances for each of the following accounts appear in an adjusted trial balance. Identify each as asset, liability, revenue, or expense. Prompts Submitted Answers Accounts Receivable Equipment Fees Earned Insurance Expense Prepaid Advertising Prepaid Rent Rent Revenue Salary Expense Salary Payable Supplies Choose a match. Choose a match Choose a match Choose a match Choose a match Choose a match Choose a match Choose a match Choose a match Choose a match
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.
![**Educational Content: Understanding Adjusted Trial Balances**
**Activity: Classification of Accounts**
In this interactive exercise, you will learn how to classify different accounts appearing in an adjusted trial balance. You will determine whether each account is an asset, liability, revenue, or expense.
**Instructions:**
For each of the following accounts, select the correct classification from the dropdown menu provided. This exercise will enhance your understanding of financial statements and the accounting process.
**Accounts to Classify:**
1. **Accounts Receivable**
- [Dropdown: Choose from Asset, Liability, Revenue, Expense]
2. **Equipment**
- [Dropdown: Choose from Asset, Liability, Revenue, Expense]
3. **Fees Earned**
- [Dropdown: Choose from Asset, Liability, Revenue, Expense]
4. **Insurance Expense**
- [Dropdown: Choose from Asset, Liability, Revenue, Expense]
5. **Prepaid Rent**
- [Dropdown: Choose from Asset, Liability, Revenue, Expense]
6. **Rent Revenue**
- [Dropdown: Choose from Asset, Liability, Revenue, Expense]
7. **Salary Expense**
- [Dropdown: Choose from Asset, Liability, Revenue, Expense]
8. **Salary Payable**
- [Dropdown: Choose from Asset, Liability, Revenue, Expense]
9. **Supplies**
- [Dropdown: Choose from Asset, Liability, Revenue, Expense]
**Note:** As you work through the exercise, your responses will be autosaved. You can adjust your answers by accessing the "Questions Filter" option.
**Key Learning Outcomes:**
- Understand different account types in financial statements.
- Accurately categorize accounts into their correct classifications.
- Gain familiarity with components of an adjusted trial balance.
Explore how these accounts impact a company's financial position and performance by correctly identifying their categories.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F40664844-acc3-41a3-bf3d-fbd2dd5f5c9e%2F36ee7cf3-71f8-43d4-820c-59249e53640f%2Foowe3tf_processed.jpeg&w=3840&q=75)
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