GENERAL INSTRUCTIONS: 1. READ THE QUESTIONS CAREFULLY AND WRITE YOUR ANSWERS ON THE ANSWER SHEET PROVIDED ON THE LAST PAGE. 2. DOUBLE RULE YOUR FINAL ANSWERS. Chill Ka Lang Company's adjusted trial balance on December 31, 2019 shows the following account balance: Accounts Cash Accounts Receivable Allowance for Bad Debts Notes Receivable (trade) Inventory Prepaid Supplies Prepaid Rent Prepaid Insurance Land Building Accumulated Depreciation-Building Service Vehicle Accumulated Depreciation-Service Vehicle Accounts Payable Notes Payable-short term loan Notes Payable (nontrade)- long term loan (P50,000 due within one year) Interest Payable Salaries Payable Utilities Payable Unearned Income Owner's Capital Income Summary Sales Gains Interest Income Freight-out Sales Commission Expense Advertising Expense Salaries Expense Rent Expense Depreciation Expense Utilities Expense Supplies Expense Insurance Expense 3 P Debit 789,826 151,040 18,000 90,447 25,040 35,870 20,660 1,000,000 2,200,000 750,000 25,524 13,097 70,254 100,784 90,902 147,556 21,004 10,528 38,282 P Credit 25,077 1,500,000 250,000 150,040 200,000 1,400,000 55,000 145,007 38,000 45,000 590,000 682,759 1,520,080 152,788 104,007
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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