Prepare Journal Entry
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.
![Activity No.6
Notes Receivable
DUE DATE
The date a note is to be paid is called the DUE DATE or Maturity Date. The period
of time between the issuance date and the due date of the short-term note may be stated
in either days or months. When the term of the note is stated in days, the due date is the
specified number of days after its issuance.
Your activity starts here----
Promissory Note
A.
P5,000
Butuan City, Philippines March 16, 2021
Ninety days
AFTER DATE
We
PROMISE TO PAY TO
THE ORDER OF Fuji Enterprises
Five Thousand and 00/100 only
PESOS
PAYABLE AT
First National Bank
VALUE RECEIVED WITH INTEREST AT 10%
NO.
10 DUE
J. P. ALINGALAN
TREASURER, CALA COMPANY
B.
P30,000.00
Butuan City, Philippines July 8, 2021
One hundred twenty days
AFTER DATE
We
PROMISE TO PAY TO
THE ORDER OF Fuji Enterprises
Thirty Thousand and 00/100 only.
PESOS
PAYABLE AT
First National Bank
VALUE RECEIVED WITH INTEREST AT 12%
11 DUE
W. P. DALUGDOG
TREASURER, AMOR COMPANY
NO.
C.
P25,000.00
Butuan City, Philippines June 20, 2021
Sixty days
AFTER DATE
We
PROMISE TO PAY TO
THE ORDER OF Fuji Enterprises
Twenty Five Thousand and 00/100 only
PESOS
PAYABLE AT
First National Bank
VALUE RECEIVED WITH INTEREST AT 8%
NO.
12 DUE
K.D. AMORES
TREASURER, KOALA COMPANY
In each case ---
1 DETERMINE THE DUE DATE
2 COMPUTE FOR THE INTEREST. (to simplify computation, use 360 days a year)
3 WHAT IS THE MATURITY VALUE QOF THE NOTE?
Actvityb, p.
4 PREPARE THE JOURNAL ENTRY.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6d11f798-77b8-4a63-94d6-9a8e9c72cc97%2F2e990826-90e0-498d-9afa-3e26f56752f7%2Fvg3m1f9_processed.jpeg&w=3840&q=75)
![The term of the note may be stated as a certain number of months after the issuance date.
In such cases, the due date is determined by counting the number of months from the
issuance date.
Example
o a three-month note dated June 5 would be due in September 5.
o a two-month dated July 31 would be due on September 30.
if the maker a note fails to pay the debt on the due date, the note is a DISHONORED NOTE
RECEIVABLE.
When a note is dishonored, the face value of the note plus any interest due is transferred to the
accounts receivable account.
Example
Assume that the P6,000, 30-day, 12% note received from Julu Co. and recorded on
November 21 is dishonored at maturity.
The entry to transfer the note and the interest back to the customer's account is as follows:
Dec 21
Accounts Receivable - Julu Co.
6,060
Notes Receivable
6,000
Interest Revenue
60
to record dishonored note and interest.
The interest of P60 has been earned; even though the note has been dishonored.
If the accounts receivable is uncollectible, the amount of P6,000 will be written off against
the Allowance for Doubtful Accounts.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6d11f798-77b8-4a63-94d6-9a8e9c72cc97%2F2e990826-90e0-498d-9afa-3e26f56752f7%2Fy3qenu_processed.jpeg&w=3840&q=75)
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