CHART OF ACCOUNTS Danns Furnishings Company General Ledger ASSETS 110 Cash 130 Merchandise Inventory 140 Office Supplies 141 Store Supplies 190 Building 191 Accumulated Depreciation-Building LIABILITIES 216 Salaries Payable 221 Notes Payable EQUITY 310 Kathy Melman, Capital 311 Kathy Melman, Drawing REVENUE 410 Sales EXPENSES 510 Cost of Merchandise Sold 523 Depreciation Expense 526 Salaries Expense 539 Selling Expenses 540 Administrative Expenses 710 Interest Expense On March 31, 20Y4, the balances of the accounts appearing in the ledger of Danns Furnishings Company, a furniture wholesaler, are as follows: Accumulated Depreciation—Building $740,900 Administrative Expenses 526,350 Building 2,507,600 Cash 180,350 Cost of Merchandise Sold 3,941,800 Interest Expense 10,500 Kathy Melman, Capital 1,611,350 Kathy Melman, Drawing 170,000 Merchandise Inventory 971,350 Notes Payable 250,200 Office Supplies 20,950 Salaries Payable 7,850 Sales 6,663,950 Selling Expenses 741,050 Store Supplies 93,00
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.
| CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||
| Danns Furnishings Company | |||||||||||||||||||||||||||||||||||||||||||||
| General Ledger | |||||||||||||||||||||||||||||||||||||||||||||
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| Accumulated Depreciation—Building | $740,900 |
| Administrative Expenses | 526,350 |
| Building | 2,507,600 |
| Cash | 180,350 |
| Cost of Merchandise Sold | 3,941,800 |
| Interest Expense | 10,500 |
| Kathy Melman, Capital | 1,611,350 |
| Kathy Melman, Drawing | 170,000 |
| Merchandise Inventory | 971,350 |
| Notes Payable | 250,200 |
| Office Supplies | 20,950 |
| Salaries Payable | 7,850 |
| Sales | 6,663,950 |
| Selling Expenses | 741,050 |
| Store Supplies | 93,000 |
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