$350.00 per engine 7 Large motorbike engines $950.00 per engine 8 Medium motorbike engines $550.00 per engine 31 Aug Supplies on hand
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.
30 Aug Provided service for cash
8 small motorbike engines $350.00 per engine
7 Large motorbike engines $950.00 per engine
8 Medium motorbike engines $550.00 per engine
31 Aug Supplies on hand
5 Boxes Air Filter $720.00 per box
6 Bottles fuel injector cleaner $200.00 per bottle
12 Boxes Spark Plug $300.00 per box
13 Boxes Brake Shoe $580.00 per box
9 Boxes Disc Pads $400.oo per box
To avoid duplication of account names and the use of improper account names, the company has provided the following list of accounts used to record its transactions as extracted from its chart of accounts:
Capital
Cash
Supplies
Right Way Manufacturers
J Manufacturers
P&S Auto
CT Ltd
Service Revenue
Discount Allowed
Rent Expense
Wages Expense
Supplies Expense
Fixtures
Auto Care
Loan NBC
Discount Received
Electricity Expense
Drawings
Requirements:
- Record the transactions stated above in the general journal.
Post the transactions to the general ledger and balance off each account- Extract a
trial balance on August 31st. - Prepare an Income Statement for the month ended August 31st, the owner’s equity statement and a
Balance Sheet as at that date
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