For the past several years, Harry Williams has operated a computer repair service in his home on a part-time basis. As of June 1, Williams decided to move to rented quarters and to devote full time to the business, which was to be known as Williams CR. Williams CR entered into the following transactions during June: June 1. The following assets were received from Harry Williams: cash $6,000; accounts receivable $1,000; supplies $1,250 and service equipment $6,200. There were no liabilities received. 2. Paid three months rent on a lease rental contract $2,400 2. Paid the premiums on property and casualty insurance policies $1,800 4. Purchased additional service equipment on account from Morrison Company $2,000 6. Received cash from customers on account, $600 9. Paid cash for a newspaper advertisement, $80 11. Paid Morrison Company for part of the debt incurred on June 4, $1,100 12. Recorded sales on account for the period Jun 1-12, $1,200 13. Paid receptionist for two weeks salary, $400 17. Recorded cash from cash customers for service revenue earned during the first half of June, $2,100 17. Paid cash for supplies $950 20. Recorded sales on account for the period June 13-20, $1,100 24. Recorded cash from cash customers for service revenue earned during the period June 17-24, $1,850 27. Received cash from customers on account, $1,200 27. Paid receptionist for two weeks salary, $400 30. Paid telephone bill for June, $65 30. Paid electricity bill for June, $140 30. Recorded cash from cash customers for service revenue earned for the period June 25-30, $850 30. Recorded sales on account for the reminder of June, $500 30. Williams withdrew $1,200 for personal use. Instruction: Record the transactions in two-column journal
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.
For the past several years, Harry Williams has operated a computer repair service in his home on a part-time basis. As of June 1, Williams decided to move to rented quarters and to devote full time to the business, which was to be known as Williams CR. Williams CR entered into the following transactions during June:
June
1. The following assets were received from Harry Williams: cash $6,000;
2. Paid three months rent on a lease rental contract $2,400
2. Paid the premiums on property and casualty insurance policies $1,800
4. Purchased additional service equipment on account from Morrison Company $2,000
6. Received cash from customers on account, $600
9. Paid cash for a newspaper advertisement, $80
11. Paid Morrison Company for part of the debt incurred on June 4, $1,100
12. Recorded sales on account for the period Jun 1-12, $1,200
13. Paid receptionist for two weeks salary, $400
17. Recorded cash from cash customers for service revenue earned during the first half of June, $2,100
17. Paid cash for supplies $950
20. Recorded sales on account for the period June 13-20, $1,100
24. Recorded cash from cash customers for service revenue earned during the period June 17-24, $1,850
27. Received cash from customers on account, $1,200
27. Paid receptionist for two weeks salary, $400
30. Paid telephone bill for June, $65
30. Paid electricity bill for June, $140
30. Recorded cash from cash customers for service revenue earned for the period June 25-30, $850
30. Recorded sales on account for the reminder of June, $500
30. Williams withdrew $1,200 for personal use.
Instruction:
- Record the transactions in two-column journal
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