Cash in BDO Cash in BPI Cash equivalents Other current assets
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.
Make the proof of cash & cash and cash equivalents with
![ABS Company showed the following information available as of December 31, 2021 before any adjustments during the
month:
Petty cash fund
Cash on hand
29,000
150,000
500,000
900,000
Cash in BDO
Cash in BPI
Cash equivalents
Other current assets
200,000
50,000
(1) The Petty cash box as of December 31 includes the following:
Currencies and coins
Check replenisment for December recorded under Cash on hand
Customer NSF check returned by BPI
9,000
30,000
10,000
(2) The petty cash book shows that the petty cash fund has an original balance of Php50,000 and the total
disbursements during December amounted to Php20,000. The entity sends replenishment checks every month
except in November, hence, an adjustment was properly made on November 30.
(3) The cash in BDO includes the following:
Certificate of deposit that has a 60-day maturity
Misplaced customer check, outstanding for more than 6 months
Customer check for Php12,0000 erroneously recorded as
40,000
20,000
21,000
20,000
11,000
(4) Suppliers' check drawn against cash in BDO mailed in January 2022
(5) Customer-post dated check recorded in cash on hand
(6) Check drawn against cash in BPI and recorded in December but waiting for pick up by the
creditor
28,000
100,000
(7) 5-month time deposit that is due on February 28, 2022 included in cash equivalents
(8) 2-year Investment in bonds, due on January 31, 2022 included in other noncurrent assets
(9) Checks drawn but still outstanding as of December 31, 2021
300,000
BDO
12,000
15,000
BPI](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F31cff7aa-d0cf-459c-943f-476bca38c598%2F5b1eba61-d0b0-48c0-a813-4df996b8218a%2F6sr2adc_processed.png&w=3840&q=75)
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