Journal entries to record sales are entered into the general journal weekly. On February 8, week 1 sales were recorded. Week one sales were $5,500. Of this amount, $2,000 was in cash, the remainder on credit. Cost of chocolate sold was $1,500. The inventory account is updated at the same time sales are recorded. On February 10 Charles paid $500 to the Green Mountain Chocolate Factory for the chocolate received on February 1. Wages were paid on February 15 in the amount of $1,500. These wages covered the first fifteen days of February. Employees in total earn $100 per day. Sales for week 2 were recorded on February 15. Sales for week two totaled $2,500. Of this amount, $1,300 was in cash, the remainder was on credit. Cost of chocolate sold was $1,125. On February 16, Charles ordered additional supplies from the Stowe Supply Co. in the amount of $350. On February 19, the supplies were received. The supplies were purchased on credit and the bill for the supplies is due in 60 days. On February 20, one of the display cases was damaged. The cost to repair the damage was $215. Charles paid for the repair with cash. On February 20, the
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.
Wages were paid on February 15 in the amount of $1,500. These wages covered the first fifteen days of February. Employees in total earn $100 per day. Sales for week 2 were recorded on February 15. Sales for week two totaled $2,500. Of this amount, $1,300 was in cash, the remainder was on credit. Cost of chocolate sold was $1,125.
On February 16, Charles ordered additional supplies from the Stowe Supply Co. in the amount of $350. On February 19, the supplies were received. The supplies were purchased on credit and the bill for the supplies is due in 60 days. On February 20, one of the display cases was damaged. The cost to repair the damage was $215. Charles paid for the repair with cash. On February 20, the
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