Entity B’s accounts payable on December 31, 20x1 had a balance of P2,300,000 before any possible adjustment for the following: a)Goods in transit purchased on credit for P23,000under an FOB destination term were recorded and included in the inventory count on December 31, 20x1 as “goods in transit” Entity B checks, drawn for P32,000 were found in the safe box during the December 31, 20x1 securities count Goods purchased under an FOB destination, freight collect term were received and recorded at the invoice cost of P60,000 on December 29, 20x1. The cash payment for the related freight of P5,000 wasdebited to the “Freight-out’ account. Goods worth P90,000 received on consignment from Entity D were recorded as an increase in accounts payable. The goods remainunsold as of December 31, 20x1 The balance of accounts payable includes P64,000 cost of goods purchased under an FOB shipping point term that were lost in transitEntity B recorded a corresponding claim against the carrier. How much is the adjusted balance of accounts payable? a. 2,304,000 b. 150,000 c. 2,240,000 d. 2,214,000
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.
Entity B’s accounts payable on December 31, 20x1 had a balance of P2,300,000 before any possible adjustment for the following:
- a)Goods in transit purchased on credit for P23,000under an FOB destination term were recorded and included in the inventory count on December 31, 20x1 as “goods in transit”
- Entity B checks, drawn for P32,000 were found in the safe box during the December 31, 20x1 securities count
- Goods purchased under an FOB destination, freight collect term were received and recorded at the invoice cost of P60,000 on December 29, 20x1. The cash payment for the related freight of P5,000 wasdebited to the “Freight-out’ account.
- Goods worth P90,000 received on consignment from Entity D were recorded as an increase in accounts payable. The goods remainunsold as of December 31, 20x1
- The balance of accounts payable includes P64,000 cost of goods purchased under an FOB shipping point term that were lost in transitEntity B recorded a corresponding claim against the carrier.
How much is the adjusted balance of accounts payable?
a. 2,304,000
b. 150,000
c. 2,240,000
d. 2,214,000
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