Ls4 Aong Corporation encounters the following situations: 1. Hong collects $1,300 from a customer in 2017 for services to be performed in 2018. 2. Hong incurs utility expense which is not yet paid in cash or recorded. 3. Hong's employees worked 3 days in 2017 but will not be paid until 2018. 4. Hong performs services for customers but has not yet received cash or recorded the transaction. 5. Hong paid $2,400 rent on December 1 for the 4 months starting December 1. 6. Hong received cash for future services and recorded a liability until the service was performed. 7. Hong performed consulting services for a client in December 2017. On December 31, it had not billed the client for services provided of $1,200. 8. Hong paid cash for an expense and recorded an asset until the item was used up. 9. Hong purchased $900 of supplies in 2017; at year-end, $400 of supplies remain unused. 10. Hong purchased equipment on January 1, 2017; the equipment will be used for 5 years. 11. Hong borrowed $10,000 on October 1, 2017, signing an 8% one-year note payable.
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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