from Construction operations and maintenance, trading and fabrication. The company wishes to prepare Extended trial balance from the following a ledger balances at the year ended 31ª"December 2020. Amount (OMR) 800,000 Prepaid Wages and Salary Expense ? 460,000 Office Expenses 135,000 Unearned Rent revenue 350,000 Sundry expenses 711,000 | Trade creditors 1,406,200| Insurance expenses 4,700 Sundry debtors 17,500 Drawings 15,400| Bills payable 10,200 Cash in hand 12,300 Repair Expenses 15,000 Bank loan 3,800 Accumulated depreciation – Plant & Machinery 22,500 Telephone charges Ledger Balance Ledger Balance Amount (OMR) Сapital Stock – 1* January 2019 Leasehold premises Furniture & Fittings Plant & Machinery Purchases 175,000 23,700 25,000 25,300 18,400 227,600 30,000 Rates and Taxes Sales Discount received 340,000 30,000 11,400 22,000 25,000 58,000 Advertisement Discount allowed Carriage on Purchase Carriage outwards Return inwards Return outwards Trade Expenses 49,000 Adjustments: a) Closing stock on 31# December 2019 - OMR 62,000 b) Depreciation on Plant & Machinery 10% . c) Wages & Salary is recorded up to February 2020. d) Interest on Bank Loan 5% e) The Company recorded OMR 18,500 of accrued Telephone charges.
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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