Establish the following T-Accounts. Write your answers on a separate sheet of the paper. Cash Accounts Receivable Supplies Prepaid Insurance Equipment Furniture and Fixtures Utilities Expense Accounts Payable Masunurin, Capital Masunurin, Withdrawals Laundry Revenues Salaries Expense Rent Expense Miscellaneous Expense On January 1, 2021, Ben Chao opened WCTC Laundry Shop. Throughout the month of January, the following transactions were completed: 1. He deposited P400,000 in a bank account in the name of the business. 2. He bought chairs and a table and paid them with P5,700 cash. 3. He bought supplies on account from Morong Supply Inc. P3,250. 4. He paid P5,750 for the monthly rental of the place. 5. He bought washing machines and dryers from Bataan Equipment Corp. amounting to P115,000. He paid them with P35,000 in cash and the balance on account. 6. He earned P19,250 revenues on cash basis for the first half of the month. 7. He bought insurance for one year for P5,800. 8. He paid accounts to Bataan Equipment Corp. worth P7,000. 9. He paid P7,000 for the electric bill. 10. He earned P12,350 revenues on cash basis for the second half of the month. 11. He paid P7,400 for the salaries of the part-time assistants. 12. He withdrew P4,500 cash for personal use. 13. He paid accounts to Morong Supply Inc. worth P2,750. 14. He paid P2,800 to the city government for sidewalk repair assessment. 15. He paid miscellaneous expenses for the month worth P1,000.
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.
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