Doris Stewart started her practice as a design consultant on September 1, 2015. During the first month of operations, the business completed the following transactions: Sep. 1 Received $42,000 cash and gave capital to Stewart. 4 Purchased office supplies, $700, and furniture, $1,900, on account. 6 Performed services for a law firm and received $1,400 cash. 7 Paid $24,000 cash to acquire land to be used in operations. 10 Performed services for a hotel and received its promise to pay the $1,000 within one week. 14 Paid for the furniture purchased on September 4 on account. 15 Paid assistant's semimonthly salary, $1,490. 17 Received cash on account, $400. 20 Prepared a design for a school on account, $700. 25 Received $1,800 cash for design services to be performed in October. 28 Received $2,100 cash for consulting with Plummer & Gordon. 29 Paid $1,200 cash for a 12-month insurance policy starting on October 1. 30 Paid assistant's semimonthly salary, $1,490. 30 Paid monthly rent expense, $650. 30 Received a bill for utilities, $350. The bill will be paid next month. 30 Stewart withdrew cash of $3,000. Requirements 1. Record each transaction in the journal using the following account titles: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Furniture; Land; Accounts Payable; Utilities Payable; Unearned Revenue; Stewart, Capital; Stewart, Withdrawals; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense. Explanations are not required. 2. Open a T-account for each of the accounts. 3. Post the journal entries to the T-accounts, using transaction dates as posting references in the ledger accounts. Label the balance of each account Bal. 4. Prepare the trial balance of Doris Stewart, Designer, as of September 30, 2015.
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.
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