Exercise at the end of Topic 3 PR 2-6 Journal entries and ledger accounts Amilia started Ammy Cleaning Services in September 2018. The followings are transactions completed during the month: Sept. 1. Amilia contributed cash RM40,000 and computer equipment of RM5,000 to the business. 2. Purchased supplies on credit, RM3,800. 4. Paid office rent for September, RM2,500. 5. Paid for advertisement, RM300. 6. Purchased a secondhand van for RM8,000. The business paid cash RM5,000, and the balance will be paid in two equal installments starting in October. 10. Paid in full for office supplies purchased on September 2. The supplier agrees to give a cash discount of RM150 to Ammy Cleaning Services. 15. Recorded service revenue for the first two weeks of business; services on credit, RM8,800, cash services, RM5,500. 17. Amilia took business cash RM250 for her personal use. 24. Received RM2,250 from a client for services previously rendered on credit. 25. Paid worker's salary, RM950. 26. Paid utility bills for the current month, RM420. Instructions 1. Journalize the above transactions. 2. Post all journal entries to the respective accounts. Determine all account balances as of September 30, 2018.
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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