LO 3.5 LO 3.6 Credit Debit Debit Credit LO 3.7 LO 3.8 $ 1,900 4,700 $ 1,200 Cash Accounts Receivable Allowance for Doubtful Accounts Inventory Prepaid Insurance Land Buildings Accumulated Depreciation: Buildings Equipment Accumulated Depreciation: Equipment Accounts Payable Notes Payable (due March 1, 2020) Unearned Rent Mortgage Payable (due January 1, 2021) Common Stock (2,000 shares) 60 8,700 600 7,300 10,000 18,075 Retained Earnings (January 1, 2019) 4,100 38,000 $ 1,300 Dividends Sales Revenue Cost of Goods Sold 11,500 Salaries Expense Unilities Expense Office Supplies Expense 3,100 Delivery Expense 4,300 Other Expenses 49,355 27,185 4,080 2,000 10,700 770 1,275 980 1,400 (continued) Copyright 20 Cengage Leaning. Al Rights Reerved. May sot be copict, sanned, or duplicated, in whole or in purt. Due to clectronic rights, some third purty conient may be sappresed fm the ellook nder Chupieris. Eiseial review hn deened that any sapprsed content des net materially alfect the overal leming experiemce. Cenpge Leuning reserves the right to semene addtional otent a ny tine if sahogsast rights restrictisen roquire i. Chapter 3 Review of a Company's Accounting System Additional adjustment information: (a) depreciation on buildings, $1,100; on equipment, $600; (b) bad debts expense, $240; (c) interest accumulated but not paid: on note payable, $50; on mortgage payable, $530 (this interest is due during the next accounting period); (d) insurance expired, $175; (e) salaries accrued but not paid $370; (f) rent was collected in advance and the performance obligation is now satisfied, $800; (g) office supplies on hand at year-cnd, $230 (expensed when originally purchased earlier in the year); and (h) the income tax rate is 30% on current income and is payable in the first quarter of 2020.
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.
Victoria Company has following account balances on December 31, 2019, prior to any adjustments: 1. Trarnsfer account balances to a 10-column worksheet and prepare a
2. Prepare
3. Prepare company's income statement,
4. Prepare closing entries in the general journal.
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