Mar. 2: The Corporation issued 40,000 shares of capital stock to Mary Tone in exchange for $80,000 cash. Mar. 4: Purchased a truck for $45,000. Made a $15,000 cash down payment and issued a note payable for the remaining balance. Mar. 5: Paid Sloan Properties $2,500 to rent office space for the month. Mar. 9: Billed customers $11,300 for services for the first half of March Mar. 15: Paid $7,100 in salaries earned by employees during the first half of March Mar. 19: Paid Bill's Auto $900 for maintenance and repair services on the company truck Mar. 20: Collected $3,800 of the amounts billed to customers on March 9. Mar. 28: Billed customers $14,400 for services performed during the second half of the month Mar. 30: Paid $7,500 in salaries earned by employees during the second half of the month Mar. 30: Received an $830 bill from SY Petroleum for fuel purchased in March. The entire amount is due by April 15. Mar. 30: Declared a $1,200 dividend payable on April 30.
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.
The financial statements of the business including income statement, statement of retained earnings and balance sheet are prepared using trial balance at end of accounting period.
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