Journalizing Service Concern Transactions Pretty Annifiel Edulan is engaged in a Rent-A-Car business to cater tourists who are visiting Tagbilaran City. Her investments consisted of the following: 2 units Toyota Van - P3,000,000 Cash which she deposited with RCBC, P50,000 Chart of Accounts Assets Owner's Equity Cash in Bank A. Edulan, Capital A. Edulan, Drawing Accounts Receivable Tires and Tubes Inventory Prepaid Insurance Transportation Equipment Liabilities Income Rental Revenue Еxpenses Gasoline and Oil Taxes and Licenses Accounts Payable Unearned Rental Revenue - Commission Expense Repairs and Maintenance Transactions: May 1- Bought gasoline and oil for the 2 units Toyota Van, P3,500. 2- Rendered transportation service to various tourists who roamed around the city to watch the Sandugo Festival, P20,000. 3- Paid business permits and licenses including that of the Land Transportation Office,P15,000. 7- Rental revenue for the week from tourists for visiting Panglao Beach Resort, Loboc River and Chocolate Hills, P12,000. 8 - Received a bill from Petron Service Center for gasoline withdrawn on account, P15,000. 9- Paid in advance car insurance (on damaged and third party liability) P7,300. 10: Bourht spare tires on account from Dura-Trac Tagbilaran, P25,000.
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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