Mr. Tristan Siy III established Siy Bookkeeping Services and had the following transactions for the month of February: Investment of P150,000 cash fund by Mr. Siy 4 into the business. Received a Charge Invoice from a supplier for the purchase of a desktop computer amounting to P32,500. The computer is estimated to be useful for five years and have a salvage value of P2,500 thereafter. Purchased supplies amounting to P18,000 in cash. 15 Paid P6,000 insurance for six months. Issued a Service Invoice for an amount of 18 P50,000 to a customer for services rendered on account. Received P35,000 cash from customers in 19 payment of their account. Paid in cash and received an official receipt 20 from the supplier for payment of accounts, P20,000. Rendered services to customers billed for 21 P30,000. Cash payment of P15,000 for the salary of an 28 employee. Mr. Siy withdrew P12,000 cash from the 28 business. Paid the telephone bill for February 28 amounting to P3,000.
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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