On 1st of August 2010 the owners started their business with R.O 30 000 deposited into the company’s bank account. On 2nd August the company received R.O 20 000 a loan from the Dhofar bank and deposited into its bank account. On 3rd of August the company bought Equipment cost R.O 7 500 on credit. On 4th of August the company bought Building costs R.O 10 000 by cheque. On 5th of August the company sold Equipment for R.O 2 500 by cheque. On 6th of August the company sold Building for R.O 3 750 on credit. On 7th of August the company paid Salaries R.O 1 250 by cheque. On 8th of August the company received Rent revenue R.O 2 500 by cheque. On 9th of August the company paid Phone expenses R.O 3 000 by cheque. On 10th of August the company received Interest revenue R.O 3 750 by cheque. On 11th of August the company bought goods for R.O 12 500 on credit. On 12 of August the company sold goods for R.O 25 000 by cheque. Required: Prepare trading account, Profit and loss account Balance Sheet. Closing stock was R.O 12 500
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.
Q1) On 1st of August 2010 the owners started their business with R.O 30 000 deposited into the company’s bank account. On 2nd August the company received R.O 20 000 a loan from the Dhofar bank and deposited into its bank account.
On 3rd of August the company bought Equipment cost R.O 7 500 on credit.
On 4th of August the company bought Building costs R.O 10 000 by cheque.
On 5th of August the company sold Equipment for R.O 2 500 by cheque.
On 6th of August the company sold Building for R.O 3 750 on credit.
On 7th of August the company paid Salaries R.O 1 250 by cheque.
On 8th of August the company received Rent revenue R.O 2 500 by cheque.
On 9th of August the company paid Phone expenses R.O 3 000 by cheque.
On 10th of August the company received Interest revenue R.O 3 750 by cheque.
On 11th of August the company bought goods for R.O 12 500 on credit.
On 12 of August the company sold goods for R.O 25 000 by cheque.
Required:
Prepare trading account,
Closing stock was R.O 12 500
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