Obi -Wan Resort opened for a business on May 1 with eight air- conditioned units. Its trial balance before adjustment an October 31 is as follows: OBI- WAN RESORT Trial Balance October 31, 2004 Account name Cash Supplies Prepaid Insurance Land Account Payable Debit 19600 3300 Credit 5400 25000 3500 Unearmed Revenue 3000 Capital Rent Revenue Salaries Expenses Utilities Expenses Repair Expenses Total 70800 40000 51000 9400 3600 117300 117300 Other Data: 1. Insurance Expires at the rate of $300 per month. 2. An Inventory count on October 31shows 900 of Supplies on hand. 3. Salaries of $1400 were unpaid at October 31. 4. Other Revenue worth of $1200 had not yet been provided to customer who paid on October 31.and not recorded. 5. Unearned Rent of $1000 was earned prior to October 31.
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.
-Record the
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