Jhoza Jacob owns and operates the "Dyosa Designs", an interior design studio. The following transactions occurred during September 2021: September 2 J. Jacob inherited $80,000 and deposited the cash in the business bank account. 3 Performed services for a client and received cash for $28,000. 8 Paid off the beginning balance of accounts payable. Purchased supplies on account, $10,000. Collected cash from customer on account $4,000. Paid salaries of employees, 16,800. Consulted on the interior design of office building and billed the clients for services rendered #96,000. Recorded the following business expenses for the month: office rent, 18,000 and Advertising expense, $4,000. Sold supplies to another business for $3,000 cash which was the cost of the supplies. Withdrew cash of $10,000 for personal use. w 10 15 18 23 26 29 30 Information: 1. Analyze the effects of the preceding transactions on the accounting equation of Dyosa Designa. Consider the balances pf her business on September 1, 2021. Determine new balances after each transaction: Date Sep. 1 Cash Assets = liabilities + Owner's Equity Account Supplies Land payable 48,000 32,000 Account receivable 9,000 6,000 J. Jacob, Capital 31,000
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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