From the following trial balance of Reenawares Trading. prepare its statement of profit or loss for the year ended 30 September 20X3 and a statement of financial position as at that date. Trial Balance as at 30 September 20X3 Debit (RM) Credit (RM) Particulars 2,368 Inventory on 1 0ctober 20X2 200 Carriage outwards 310 Carriage Inwards 248 322 Returns Inwards and outwards 10,874 Purchases 19,600 Sales 3,862 Salaries and wages 211 Advertisement 304 Rent 78 Insurance Repairs of motor vehicle 164 Office expenses 216 Travel expenses 166 General expenses 314 Premises 35,555 Fixtures and fitings 2,800 Trade receivables and payables 3,896 1,231 Fixed deposit at BIMB 8,000 Cash in hand 482 Cash at bank 1,210 Drawings 1,200 Capital 36,000 Loan from MBF Finance 15,000 Discount allowed and recelved 45 200 Interest received 150 72,503 72,503 Additional information: a) Inventory as at 30 September 20X3 was RM2,900 b) Salaries amounting RM500 was unpaid at the end of the year. c) Depreciation for non-current assets was not provided at the end of the year as follows: fixtures and fittings amounting RM280 premises amounting RM7,111
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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