Part 1 For this first part, you will set up your own fictional business using either GAAP or IFRS standards. In a typed document, accomplish the following: Provide the name and location of your business Identify the goods and/or services offered Identify which accounting standards will be used Provide a list of accounts (also known as the chart of accounts); your list must include assets, liabilities, equity, revenue, and expense as well as current and long-term assets Provide beginning balance amounts to each account in the list Create an accounting journal consisting of a minimum of ten business transactions Construct basic financial statements based on your transactions Perform a basic ratio analysis to assess the success or failure of the business
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.
Part 1
For this first part, you will set up your own fictional business using either GAAP or IFRS standards. In a typed document, accomplish the following: Provide the name and location of your business Identify the goods and/or services offered Identify which accounting standards will be used Provide a list of accounts (also known as the chart of accounts); your list must include assets, liabilities, equity, revenue, and expense as well as current and long-term assets Provide beginning balance amounts to each account in the list Create an accounting journal consisting of a minimum of ten business transactions Construct basic financial statements based on your transactions Perform a basic ratio analysis to assess the success or failure of the business
Part 2
Your business is now providing goods and services to people across the world. You have also started working with multiple currencies. In your document, describe how working with multiple currencies can have an effect on financial on financial statements. List the steps you could take to reduce the risk of loss to your business when working with multiple currencies. Combine both parts of the assignment into a single Word document. Your submission should be 6-10 pages, double-spaced, 12-point font, and in Times New Roman. No references are required, but if you choose to use them, these should be cited in APA format.
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