Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 20Y5. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated in this chapter. During May, Kelly Consulting entered into the following transactions: May 3 Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $4,500. 5 Received cash from clients on account, $2,450. 9 Paid cash for a newspaper advertisement, $225. 13 Paid Office Station Co. for part of the debt incurred on April 5, $640. May 15 Provided services on account for the period May 1-15, $9,180. 16 Paid part-time receptionist for two weeks' salary including the amount owed on April 30, $750. 17 Received cash from cash clients for fees earned during the period May 1-16, $8,360. Record the following transactions on Page 6 of the journal: 20 Purchased supplies on account, $735. 21 Provided services on account for the period May 16-20, $4,820. 25 Received cash from cash clients for fees earned for the period May 17-23, $7,900. 27 Received cash from clients on account, $9,520. 28 Paid part-time receptionist for two weeks' salary, $750. 30 Paid telephone bill for May, $260. 31 Paid electricity bill for May, $810. 31 Received cash from cash clients for fees earned for the period May 26-31, $3,300. 31 Provided services on account for the remainder of May, $2,650. 31 Kelly withdrew $10,500 for personal use. 1. Journalize each of the May transactions in the two-column journal starting on Page 5 of the journal. 2. Journalize the adjusting entries on a separate page. 3. Create an unadjusted trial balance.
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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