January 31 2018 Account Acc No. Debit Credit Cash 100 $5,653 Prepaid Rent 115 $6,000 Prepaid Insurance 116 $1,800 Supplies 117 $520 Equipment $89,563 120 Accounts Payable 200 $890 me 201 $10,387 Bank Loan 300 $94,212 Capital 301 $1,600 Drawings 400 $15,493 Ticket Sales 401 $2,407 Confectionery Income Salaries Expense 500 $6,801 501 $2,563 Advertising Expense Film Rental Expense 502 $3,563 503 $850 Cleaning Expense 504 $95 Telephone Expense 505 $2,293 Equip Repair Maintenance Expense 506 $248 Film Transportation Expense 507 $858 Heating Expense 508 $632 Electricity and Water Expense General Expense 509 $350 Total $123.489 $123.389
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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