nse 790 Sales discounts 15,200 Insurance expense 1,240 Sales returns and allowances 3,900 Sales 225,000 TV advertising expense 3,000 Office salaries expense 32,100 Interest revenue 660 Rent expense—Selling space 10
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.
Fit-for-Life Foods reports the following income statement accounts for the year ended December 31.
| Gain on sale of equipment | $ | 6,250 | $ | 420 | ||
| Office supplies expense | 790 | Sales discounts | 15,200 | |||
| Insurance expense | 1,240 | Sales returns and allowances | 3,900 | |||
| Sales | 225,000 | TV advertising expense | 3,000 | |||
| Office salaries expense | 32,100 | Interest revenue | 660 | |||
| Rent expense—Selling space | 10,500 | Cost of goods sold | 88,800 | |||
| Sales staff wages | 22,400 | Sales commission expense | 13,600 | |||
Prepare a multiple-step income statement.
Income statement refers to the form of a financial statement which reflects the revenue generated by a company through selling its product and also the expenses involve in it in order to drive the gross profit of the company.
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