Learning Objectives 4, 5: Journalize and post transactions; construct and use atrial balance) Olivia Matthews, Certified Public Accountant, operates as a professional corporation (P.C.). The business completed these transactions during the first part of May 2018:May Received $12,000 cash from Matthews, and issued common stock to her.Paid monthly oce rent, $500.Paid cash for a desktop computer, $1,800, with the computer expected toremain in service for five years.Purchased oce furniture on account, $6,000, with the furniture projectedto last for five years.Purchased supplies on account, $900.Performed tax services for a client and received cash for the full amountof $600.Received bill and paid utility expenses, $750.Performed consulting services for a client on account, $3,100.2234591218Requirements1. Journalize the transactions for Olivia Matthews, Certified Public Accountant. Explanationsare not required.2. Post to the T-accounts. Key all items by date and determine the ending balance in eachaccount. Denote an account balance on May 18, 2018, as Bal.3. Prepare a trial balance at May 18, 2018. In the Serial Exercise of Chapter 3, we will addtransactions for the remainder of May and will require a trial balance at May 31.
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 4, 5: Journalize and
May Received $12,000 cash from Matthews, and issued common stock to her.
Paid monthly oce rent, $500.
Paid cash for a desktop computer, $1,800, with the computer expected to
remain in service for five years.
Purchased oce furniture on account, $6,000, with the furniture projected
to last for five years.
Purchased supplies on account, $900.
Performed tax services for a client and received cash for the full amount
of $600.
Received bill and paid utility expenses, $750.
Performed consulting services for a client on account, $3,100.
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Requirements
1. Journalize the transactions for Olivia Matthews, Certified Public Accountant. Explanations
are not required.
2. Post to the T-accounts. Key all items by date and determine the ending balance in each
account. Denote an account balance on May 18, 2018, as Bal.
3. Prepare a trial balance at May 18, 2018. In the Serial Exercise of Chapter 3, we will add
transactions for the remainder of May and will require a trial balance at May 31.
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