Geranium Traders is a clothing store in Diepkloof. It is owned by Petunia Mokoena. Geranium Traders use the perpetual inventory system to record inventory transactions. Mark‐up is 20% on the selling price on all good sold. The business is a registered VAT vendor and trades only with registered VAT Vendors. A VAT rate of 15% applies where appropriate. The following transactions took place in the month of August 2020: NO DATE TRANSACTION 1.1 1 Owner contributed cash R200 000 1.2 3 Purchased goods for cash R10 000 excluding VAT 1.3 5 Credit sales to Mr Abdul R2 000 excluding VAT 1.4 6 Paid R345 in cash for an advert in the local newspaper 1.5 8 Petunia took clothing for personal use to the value of R5 000, being the cost price, excluding VAT 1.6 10 Purchased clothing on credit from PAM Clothing R6 000 excluding VAT 1.7 12 Cash sales R460 including VAT 1.8 14 Mr Ang, a debtor has been declared bankrupt. His balance owing is R3 500. Geranium Traders receives 50c in the rand owed by Mr Ang and the remaining outstanding balance must be written off. 1.9 17 Purchased clothing on credit from Cherry Clothing R4 025 including VAT 1.10 19 Debtor Mr Abdul paid R1 000 in part settlement of his account 1.11 24 Paid PAM Clothing the full amount outstanding of R12 000 and received a 10% settlement discount Q.1.1 Analyse each of the above transactions and complete the table as follows: Example: Paid R200 for Telephone Account NO ACCOUNT DEBITED ACCOUNT CREDITED ASSETS OWNER'S EQUITY LIABILITIES Example Telephone Bank -200 -200
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.
Geranium Traders is a clothing store in Diepkloof. It is owned by Petunia Mokoena. Geranium Traders use the perpetual inventory system to record inventory transactions. Mark‐up is 20% on the selling price on all good sold.
The business is a registered VAT vendor and trades only with registered VAT Vendors. A VAT rate of 15% applies where appropriate. The following transactions took place in the month of August 2020:
| NO | DATE | TRANSACTION |
| 1.1 | 1 | Owner contributed cash R200 000 |
| 1.2 | 3 | Purchased goods for cash R10 000 excluding VAT |
| 1.3 | 5 | Credit sales to Mr Abdul R2 000 excluding VAT |
| 1.4 | 6 | Paid R345 in cash for an advert in the local newspaper |
| 1.5 | 8 | Petunia took clothing for personal use to the value of R5 000, being the cost price, excluding VAT |
| 1.6 | 10 | Purchased clothing on credit from PAM Clothing R6 000 excluding VAT |
| 1.7 | 12 | Cash sales R460 including VAT |
| 1.8 | 14 | Mr Ang, a debtor has been declared bankrupt. His balance owing is R3 500. Geranium Traders receives 50c in the rand owed by Mr Ang and the remaining outstanding balance must be written off. |
| 1.9 | 17 | Purchased clothing on credit from Cherry Clothing R4 025 including VAT |
| 1.10 | 19 | Debtor Mr Abdul paid R1 000 in part settlement of his account |
| 1.11 | 24 | Paid PAM Clothing the full amount outstanding of R12 000 and received a 10% settlement discount |
Q.1.1 Analyse each of the above transactions and complete the table as follows:
Example: Paid R200 for Telephone Account
| NO | ACCOUNT DEBITED | ACCOUNT CREDITED | ASSETS | OWNER'S EQUITY | LIABILITIES |
| Example | Telephone | Bank | -200 | -200 |
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