itu Library distributes books to retail stores and credit terms of 2/10, n/30 to all of its customers. During June, the following merchandising transactions occurred. June 1 Purchased books on account for $1,700 from Binsfeld Publishers, FOB destination, terms 3/10, n/30. The appropriate party also made a cash payment of $50 for the freight on this date. June 3 Sold books on account to Reading Rainbow for $2,550, FOB Destination. The cost of the books sold was $1,490. The appropriate party also made a cash payment of $50 for the freight on this date. June 6 Received $100 credit as an allowance for low quality books from Binsfeld Publishers. June 7 Granted $100 credit as an allowance for low quality books to Reading Rainbow. June 9 Paid Binsfeld Publishers in full. June15 Received payment in full from Reading Rainbow. Chart of accounts includes the following: No. 101 Cash, No. 11
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.
Question no 1
Titu Library distributes books to retail stores and credit terms of 2/10, n/30 to all of its customers. During June, the following merchandising transactions occurred.
June 1 Purchased books on account for $1,700 from Binsfeld Publishers, FOB destination, terms 3/10, n/30. The appropriate party also made a cash payment of $50 for the freight on this date.
June 3 Sold books on account to Reading Rainbow for $2,550, FOB Destination. The cost of the books sold was $1,490. The appropriate party also made a cash payment of $50 for the freight on this date.
June 6 Received $100 credit as an allowance for low quality books from Binsfeld Publishers.
June 7 Granted $100 credit as an allowance for low quality books to Reading Rainbow.
June 9 Paid Binsfeld Publishers in full.
June15 Received payment in full from Reading Rainbow.
Chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 201 Accounts Payable, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts,No 503 Freight out,+ and No. 505 Cost of Goods Sold.
Required:
Journalize the transactions for Titu library, where they are using perpetual inventory system.
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