(Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; accountfor sales allowances) Niagara Jewelry sells to retailers who then resell the products. Niagaradoes not offer sales discounts for early payment; it asks that customers pay in full within15 days or at the point of sale with a credit card. The company had the following selectedtransactions during July:July 2 Sold $150,000 of merchandise to Lakeside Jewels on account.Sold $12,000 of merchandise to Superior Crystals, which paid by credit card. Thecredit card company charges Niagara a fee of 2% on credit card sales.July 17Shining Stones noticed that some of the merchandise received was damaged, so itreturned $17,000 worth of merchandise to Niagara.July 30July 3July 16July 19Shining Stones paid the balance of what it owed for the purchase on July 17.Lakeside Jewels paid the balance of what it owed for the purchase on July 2.Sold $185,000 of merchandise to Shining Stones on account.Requirements1. Journalize Niagara’s July transactions. (You do not need to record the cost of goods sold)2. Calculate the gross sales revenue for the month.
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.
(Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; account
for sales allowances) Niagara Jewelry sells to retailers who then resell the products. Niagara
does not offer sales discounts for early payment; it asks that customers pay in full within
15 days or at the point of sale with a credit card. The company had the following selected
transactions during July:
July 2 Sold $150,000 of merchandise to Lakeside Jewels on account.
Sold $12,000 of merchandise to Superior Crystals, which paid by credit card. The
credit card company charges Niagara a fee of 2% on credit card sales.
July 17
Shining Stones noticed that some of the merchandise received was damaged, so it
returned $17,000 worth of merchandise to Niagara.
July 30
July 3
July 16
July 19
Shining Stones paid the balance of what it owed for the purchase on July 17.
Lakeside Jewels paid the balance of what it owed for the purchase on July 2.
Sold $185,000 of merchandise to Shining Stones on account.
Requirements
1. Journalize Niagara’s July transactions. (You do not need to record the cost of goods sold)
2. Calculate the gross sales revenue for the month.
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