Dec 1 Owner invested cash of 530,000 and land of 1,200,000 and equipment amounting to 200,000 Dec 3 Dec 6 Dec 8 palance after 20 days Dec 11 Purchased some machinery worth 115,000 on account Dec 15 Rendered services to clients worth 200,000 on account Paid for advertising expense worth 45,000 Purchased office supplies by cash, 20,000 Purchased machineries costing 100,000. Paid 50% and promised to pay the ec 18 Make 50% payment on the balance owed on Dec 8 ec 19 Rendered 510,000 worth of services and collected cash ec 20 Rendered 85,000 worth of services on account ec 21 Borrowed a loan amounting to 5,000,000 with 12% interest annually ec 26 Withdraw cash for personal use 20,000 ec 31 Paid for the salaries of staff 170,000 ec 31 Rendered services and collected cash 195.000
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.
Basic Accounting
Using the transactions given in the picture, prepare the
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