June 8, 2017 – NoDirt entered into a one year contract to provide cleaning services to a customer. NoDirt will start providing the services on July 1, 2017. The customer paid NoDirt $4,500 cash when the contract was signed on June 8, 2017. The $4,500 is payment for the first three months of cleaning service. A. Cash 4,500 Service Revenue 1,500 Prepaid Cleaning Service Receivable 3,000 B. Service Revenue 4,500 Cash 4,500 C. Unearned Service Revenue 4,500 Cash 4,500 D. Retained Earnings 4,500 Services Payable 4,500 E. None of the above
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 14
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June 8, 2017 – NoDirt entered into a one year contract to provide cleaning services to a customer. NoDirt will start providing the services on July 1, 2017. The customer paid NoDirt $4,500 cash when the contract was signed on June 8, 2017. The $4,500 is payment for the first three months of cleaning service.
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A. Cash 4,500
Service Revenue 1,500
Prepaid Cleaning Service Receivable 3,000
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B. Service Revenue 4,500
Cash 4,500
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C. Unearned Service Revenue 4,500
Cash 4,500
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D.
Retained Earnings 4,500Services Payable 4,500
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E. None of the above
1a.. June 15, 2017 – NoDirt performed $3,000 of cleaning services for a customer. The customer paid $500 cash on June 15 and will pay the remaining amount in the future.
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A. Cash 500
Service Revenue 500
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B. Cash 500
Accounts Receivable 2,500Service Revenue 3,000
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C. Service Revenue 500
Cash 500
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D. Service Revenue 3,000
Cash 500
Accounts Receivable 2,500
5 E. None of the above1b June 17, 2017 – NoDirt paid for the supplies purchased on June 2, 2017.-
A. Supplies Expense 5,000
Cash 5,000
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B. Cash 5,000
Accounts Payable 5,000
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C. Accounts Payable 5,000
Cash 5,000
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D. Cash 5,000
Supplies Expense 5,000
5 E. None of the above
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