FINANCIAL STATEMENTS & CLOSING ENTRIES: The adjusted trial balance of Dennis Catering Service at the end of December 2020 is s follows: Dennis Catering Service Adjusted Trial Balance December 31,2020 Debit Credit Cash P13,000 Accounts Receivable 29,250 Supplies Prepaid insurance 3,380 14,300 Equipment 19,500 Accumulated Depreciation- Equipment Computer System 650 28,600 Accumulated Depreciation Accounts Payable Wages Payable Dennis Capital 715 22,490 2,600 91,000 Dennis Withdrawals 32,500 Catering Service Income 74,750 Cost of Goods Sold 13,000 Wages Expense Supplies expense Insurance Expense Depreciation Expense- Equipment 13,000 7,020 1,300 650 Depreciation Expense - Computer Telephone Expense 715 1,040 Rent Expense 13,000 Utilities Expense ТOTAL 1,950 P192,205 P192,205 Required: 1. Statement of Comprehensive income 2. Statement of Changes in Equity 3. Statement of Financial Position 4. Closing Entries
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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