• Computer Equipment owned by the business: original purchase price was $60,000, estimated useful life was 7 years, and estimated residual value was $8,600 at the end of the useful life. Depreciation is calculated on a monthly basis using the straight line method. The monthly depreciation charge is calculated as the yearly depreciation expense divided by the number of months in a year. A number of computer lessons totalling $2,100 were provided during the month of June for Hypertronics but not yet invoiced. • The estimated telephone bill payable as at the end of June is $100. • Instructors work every single day during the week including weekends and are paid on a periodic basis. Wages were last paid up to and including June 17. Wages incurred after that day (from June 13 to June 30 inclusive) are estimated to have been $620 per day. • Interest expense incurred during the month of June but not yet paid to BitiBank for the bank loan is $870. • Provided $2,000 worth of computer lessons during the month of June in relation to the cash received in advance from Turbo Tech on June 8. • Office supplies totaling $1,184 are still on hand at June 30. • $3,400 of worth prepaid rent expired during the month of June.
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.
Prepare
| General Journal | ||||
| Date | Account Title and Explanation | Post Ref | Debit | Credit |
| General Ledger | |||||
| Date | Description | Ref | Debit | Credit | Balance |
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