OTHER DATA INSTRUCTIONS a. No interest has yet been paid on the note payable. Accrued interest at April 30 amounts to $180. b. Salaries earned by the office staff but not yet recorded or paid amounted to $3,470 at April 30. c. Many clients are asked to make an advance payment for the legal services to be rendered in future months. These advance payments are credited to the Unearned Retainer Fees account. During April, $7,700 of these advances were earned by the business. d. Some clients are not billed until all services relating to their matter have been rendered. As of April 30, services priced at $4,780 had been rendered to these clients but had not yet been recorded in the accounting records. e. A professional liability insurance policy was purchased on April 1. The premium of $3,000 for the first six months was paid and recorded as Unexpired Insurance. f. The business rents an office at a monthly rate of $1,600. On April 1, three months' rent was paid in advance and charged to the Prepaid Office Rent account. g. Office supplies on hand at April 30 amounted to $1,100. h. The office equipment was purchased on April 1 and is being depreciated over an estimated useful life of 10 years. a. Prepare the adjusting entries required at April 30. b. Determine the amount of net income to be reported in the company's income state- ment for the month ended April 30, 1997.
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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