On October 1, 2021, Santana Rey launched a computer services company, Business Solutions, that is organized as a corporation and provides consulting services, computer system installations, and custom program development. October 1 S. Rey invested $45,000 cash, a $20,000 computer system, and $8,000 of office equipment in the company in exchange for its common stock.. October 3 The company purchased $1,420 of computer supplies on credit. October 6 The company billed Easy Leasing $4,800 for services performed in installing a new web server. October 8 The company paid $1,420 cash for the computer supplies purchased on credit on October 3. October 10 The company hired a part-time assistant. October 12 The company billed Easy Leasing another $1,400 for services performed. October 15 The company received $4,800 cash from Easy Leasing as partial payment toward its account. October 17 The company paid $805 cash to repair its computer equipment. October 20 The company paid $1,728 cash for advertisements published on Facebook. October 22 The company received $1,400 cash from Easy Leasing toward its account. October 28 The company billed IFM Company $5,208 for services performed. October 31 The company paid $875 cash for the assistant's wages for this month. October 31 The company paid $3,600 cash in dividends to the owner (sole shareholder).
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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