Indicate the impact each transaction had on net income. Decreases to net income should be indicated with a minus sign. Dates: May 01 to: May 31 Amount of increase Transaction Impact transaction has on income: (decrease) May 1) Prepared a company check for $350 to establish the petty cash fund. Net income was unchanged $ May 15) Prepared a company check to replenish the fund for the following expenditures made since May 1: $109 for janitorial services, $82 for miscellaneous expenses, postage expenses of $54, $27 to Facebook for advertising expense. Counted $89 remaining in the petty cash box. Net income decreased by: May 16 Prepared a company check for $150 to increase the fund to $500. Net income was unchanged May 31 The petty cashier reports that $200 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15: postage expenses of $172, business mileage, $86, $28 to deliver merchandise to a customer, terms FOB destination. Net income decreased by: May 31 The company decides that the May 16 increase in the fund was too large. It reduces the fund by $120, leaving a total of $380. Net income was unchanged In total, net income increased (decreased) by: $
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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