Frank Petronick decided to start an accounting practice after graduation from university. The following is a list of events that occurred concerning Frank's practice during June 2024, the first month of operations. June 1 4 June 4 6 8 11 15 15 18 26 28 30 Transaction 4 4 6 8 15 15 18 26 28 After shopping around, Frank found an office to lease and signed a lease agreement. The lease calls for a payment of $1,041 rent per month. Borrowed $3,847 from his grandmother to assist in starting up his new business. Deposited the $3,847 plus $525 of his own cash in a new bank account at the Bank of Montreal under the name Petronick Accounting Services. Paid the landlord the first month's rent. Purchased furniture for $3,290 on account. Moved into the office and obtained the first assignment from a client to prepare year-end financial statements for $1,860. Performed the work on the assignment and sent an invoice to the client for $1,860. Paid half of the amount of the June 8 purchase of furniture. Purchased supplies on account for $347. Paid for internet services, $55 cash. Collected $913 of the June 15 billing to the customer. Withdrew cash from the business of $143 for personal expenses. Cash 3,847 4,372 1,060 i 930 i 55 913 Accounts Receivable 1,860 913 Supplies i i 347 Furniture 3,290 10.0. Accounts Payable 3,290 TODO 930 347
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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