Cash 12000 Inventory 1600 Prepaid Rent 1200 Prepaid Insurance 1000 Display Equipment 6000 Acc. Deprecation 4000 Accounts Payable 3000 Owners Capital 14000 Sales 20000 Sales Return&All 500 Sales Discount 200 cost of goods sold 12000 salary Expense 4000 Plumbing Expense 500 Utilities Expense 2000 Totals 41000 41000 Based on the adjusted trial balance above, prepare an INCOME STATMENT STATEMENT OF OWNERS EQUITY and BALANCE SHEET
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.
Cash 12000
Inventory 1600
Prepaid Rent 1200
Prepaid Insurance 1000
Display Equipment 6000
Acc. Deprecation 4000
Accounts Payable 3000
Owners Capital 14000
Sales 20000
Sales Return&All 500
Sales Discount 200
cost of goods sold 12000
salary Expense 4000
Plumbing Expense 500
Utilities Expense 2000
Totals 41000 41000
Based on the adjusted
STATEMENT OF OWNERS EQUITY and BALANCE SHEET
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