Practice Set 3. Instructions: Using Ms Excel, identify whether the following independent transaction is a book or a bank reconciling. In addition, determine the amount of the error and state whether the amount will be added or deducted in the preparation of the bank reconciliation (use adjusted method). 1. Eagle Repairs received Php1,500 from Jane. The bookkeeper recorded the amount as Php500. 2. Nation Bank collected from the customer of Eagle the sum of Php5,000 representing payment of the said customer to Eagle. No entry was made in the books of Eagle. 3. The bank teller deducted CK 123 for Php3,500 from the account of Eagle. The said check was issued by Eagles Company a different depositor of the bank 4. The bookkeeper of Eagle recorded Check No. 345 in the Cash Disbursement Journal as Php5,205. The correct amount of the check was Php5,250. 5 The deposits of Eagle earned interest of Php100 for the month. Eagle does not have knowledge of interest earned until it receives the bank statement.
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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