On 10th January 2006, Martin Kinuthia, a sole trader received his monthly statement for December 2005. The statement showed the following: Date 2005 Particulars Debit Sh. Credit Sh. Balance Sh. Dec 1 5 5 5 8 10 13 14 20 20 21 21 24 27 28 29 29 31 Balance Cheque No.417864 (Electricity) Dividend Local cheque deposit (Solomon Otieno) Cheque No. 417866 (Jemima Nyambura) Cheque No. 417867 (Young traders) Miscellaneous credit (Kevin Kagai) Standing Order Cheque No. 417865 (Janet Aoko) Local cheque deposit (Donald Korir) Cheque No. 417868 (David Okoth) Cheque No. 417870 (Rent) Bank charges Local cheque deposit (J. Nduta) Direct debit Cheque No. 417873 (Daniel Wambua) Local cheque deposit (Joseph Ondieki) Cheque No. 417871 (Moses Siringi) 24,300 17,400 1,700 3,200 30,700 9,500 16,100 1,800 8,800 1,200 2,500 2,600 21,200 18,500 11,800 4,700 27,900 186,200 161,900 164,500 185,700 168,300 166,600 185,100 181,900 151,200 163,000 153,500 137,400 135,600 140,300 131,500 130,300 158,200 155,700 Martin Kinuthi’s Cash book for the month of December 2005 was as follows CASH BOOK 2005 Sh. 2005 Cheque No Sh. Dec 1 4 9 19 24 27 29 30 Balance B/d Solomon Otieno Kevin Kagai Donald Korir Joy Nduta Joseph Ondieki Owen Ndubi Walter Oyugi 186,200 21,200 18,500 11,800 4,700 27,900 9,800 13,400 293,500 Dec 1 2 5 6 10 14 16 20 21 22 31 Electricity Janet Aoko Jemimah Nyambura Young Traders David Okoth Victor Karanja Rent Moses Siringi Steve Mahithya Daniel Wambua Bal C/d 417864 417865 417866 417867 417868 417869 417870 417871 417872 417873 24,300 30,700 17,400 1,700 9,500 7,100 16,100 2,500 3,700 1,200 179,300 293,500 Required: a) Updated Cash book for Martin as at 31-12-2005 b) Bank Reconciliation statement
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.
On 10th January 2006, Martin Kinuthia, a sole trader received his monthly statement for December 2005. The statement showed the following:
|
Date 2005 |
Particulars |
Debit Sh. |
Credit Sh. |
Balance Sh. |
|
Dec 1 5 5 5 8 10 13 14 20 20 21 21 24 27 28 29 29 31 |
Balance Cheque No.417864 (Electricity) Dividend Local cheque deposit (Solomon Otieno) Cheque No. 417866 (Jemima Nyambura) Cheque No. 417867 (Young traders) Miscellaneous credit (Kevin Kagai) Standing Order Cheque No. 417865 (Janet Aoko) Local cheque deposit (Donald Korir) Cheque No. 417868 (David Okoth) Cheque No. 417870 (Rent) Bank charges Local cheque deposit (J. Nduta) Direct debit Cheque No. 417873 (Daniel Wambua) Local cheque deposit (Joseph Ondieki) Cheque No. 417871 (Moses Siringi) |
24,300
17,400 1,700
3,200 30,700
9,500 16,100 1,800
8,800 1,200
2,500 |
2,600 21,200
18,500
11,800
4,700
27,900 |
186,200 161,900 164,500 185,700 168,300 166,600 185,100 181,900 151,200 163,000 153,500 137,400 135,600 140,300 131,500 130,300 158,200 155,700 |
Martin Kinuthi’s
CASH BOOK
|
2005 |
|
Sh. |
2005 |
|
Cheque No |
Sh. |
|
Dec 1 4 9 19 24 27 29 30 |
Balance B/d Solomon Otieno Kevin Kagai Donald Korir Joy Nduta Joseph Ondieki Owen Ndubi Walter Oyugi
|
186,200 21,200 18,500 11,800 4,700 27,900 9,800 13,400
293,500 |
Dec 1 2 5 6 10 14 16 20 21 22 31 |
Electricity Janet Aoko Jemimah Nyambura Young Traders David Okoth Victor Karanja Rent Moses Siringi Steve Mahithya Daniel Wambua Bal C/d |
417864 417865 417866 417867 417868 417869 417870 417871 417872 417873
|
24,300 30,700 17,400 1,700 9,500 7,100 16,100 2,500 3,700 1,200 179,300 293,500 |
Required: a) Updated Cash book for Martin as at 31-12-2005 b)
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