Paul Richard has a business named Splash-wear which sells various leather jackets to the market. During the month of February, the following transactions occurred: Feb 1: Purchased jackets on account from a supplier of $30,000 of which $15,000 paid in cash. Feb 6: Sold clothes of $75,000 in which 50% has been received in cash and for the rest 2/10 net 30 discount term has been imposed. Feb 9: Paid insurance premium for $12,000 in cash which covers 1-year insurance policy. Feb 13: Payment has been received from the accounts receivable (related to Feb 6). Feb 17: One of the customers have paid $1,500 as the pre-order charge for a classy leather jacket which is not available in the store right now. Feb 21: Made full payment to the supplier (Feb 1) of $15,000, less 3% discount. Feb 23: Utility bill of $700 has been paid from the bank. Feb 26: Purchased staplers, scissors, shopping bags, punching machine and envelopes for $ 5,500 on the account. Feb 28: One of the previous payment from an account receivable is being uncollectible of $1,000. Required: a) Post the journal entries to the ledger. b) Present a trial balance from the ledger accounts..
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.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 3 images
