Notwist Copy Company incurred the following transactions during the month of March 2022: March 1 M. Acher invests $70,000 cash to start the business. March 3 Purchased three pieces of equipment for $160,000, paying $50,000 cash and signing a 5-year, 10% note for the remainder. March 5 Purchased $5,000 supplies on credit. March10 Cash revenue amounted to $7,000. March 15 Paid $500 cash for radio advertising. March 20 Paid $800 on account for supplies purchased on March 5. March 22 Owner withdrew $2,100 from the business for personal expenses. March 29 Paid $1,200 cash for rent for the current month. March 30 Received $2,000 cash advance from a customer for future copying. March 31 Billed a customer for $575 for photocopy work done. Requirements: 1) Journalize the above transactions. 2) Prepare necessary T accounts. 3) Prepare a trial balance on March 31, 2022 and prove the arithmetic accuracy of the accounts.
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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