David started a small new business in Bicester at the 1st September 2020. He is preparing accounts to 30th September 2020. His transactions in first month were as follows: 1/09 David contributed to the business with a Computer with value of £2000, £20,000 in the Bank and £4200 cash and 2/09 Purchased goods £800 on credit from Dawson 3/09 Bought a brand new high speed Computer £2000 paying by cheque 5/09 Sold goods for £400 and received the money in Bank 6/09 Bought goods on cash £400 from M Maurice 10/09 Paid rent by cheque £600 12/09 Paid in Cash £100 for repairing Computer 18/09 Goods returned to Dawson £100 21/09 Let off part of the premises receiving rent by cheque £300 23/09 Sold goods on credit to Joseph £400 23/09 Sold goods of £1500 and received cash 24/09 Bought a car for business use paying by cheque £1000 30/09 Paid the month’s wages by cash £700 30/09 David took cash for herself £450 a) Write double entry record the transactions in T-accounts b) Balance the accounts and bring down an opening balance c) Extract a Trial balance as at 30th September 2020 d) Prepare an Income Statement for the period ended 30th September 2019 **Assuming closing inventory of £ 250.00 e) Prepare a Statement of Financial Position as at 30th September 2019
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.
David started a small new business in Bicester at the 1st September 2020. He is
preparing accounts to 30th September 2020. His transactions in first month
were as follows:
1/09 David contributed to the business with a Computer with value of £2000,
£20,000 in the Bank and £4200 cash and
2/09 Purchased goods £800 on credit from Dawson
3/09 Bought a brand new high speed Computer £2000 paying by cheque
5/09 Sold goods for £400 and received the money in Bank
6/09 Bought goods on cash £400 from M Maurice
10/09 Paid rent by cheque £600
12/09 Paid in Cash £100 for repairing Computer
18/09 Goods returned to Dawson £100
21/09 Let off part of the premises receiving rent by cheque £300
23/09 Sold goods on credit to Joseph £400
23/09 Sold goods of £1500 and received cash
24/09 Bought a car for business use paying by cheque £1000
30/09 Paid the month’s wages by cash £700
30/09 David took cash for herself £450
a) Write double entry record the transactions in T-accounts
b) Balance the accounts and bring down an opening balance
c) Extract a
d) Prepare an Income Statement for the period ended 30th September
2019
**Assuming closing inventory of £ 250.00
e) Prepare a
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