Benson Auto Repair had the following account balances after adjustments. Assume all accounts had normal balances. View the account balances. 8. Prepare the closing entries for Benson Auto Repair at December 31. 9. What is the balance of Retained Earnings after closing entries have been recorded? (Use a T-account to determine the balance.) 8. Prepare the closing entries for Benson Auto Repair at December 31. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) First we will close the Service Revenue account. Date Clos. (1) Accounts and Explanation Next we will close the expense accounts. Date Clos. (2) Debit Credit Account balances Test Overview: Test: MIDTERM chapters 1- Cash $ 4,000 Common Stock $ 20,000 Accounts Receivable 3,200 Retained Earnings, January 1 15,700 Prepaid Rent 1,900 Dividends 2,100 Accounts and Explanation Debit Credit Supplies 3,000 Service Revenue 1,600 Equipment 34,800 Depreciation Expense-Equipment 300 Accumulated Depreciation-Equipment 1,600 Salaries Expense 800 Accounts Payable 5,400 Rent Expense 500 Notes Payable (long-term) 7,000 Utilities Expense 600 Supplies Expense 100 Now we will close the Income Summary account. Date Clos. (3) Accounts and Explanation Debit Credit Print Done
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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