Prepare a journal entry on December 23 for the withdrawal of $27,000 by Graeme Schneider for personal use. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. PAGE 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 CHART OF ACCOUNTSGeneral Ledger ASSETS 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 15 Land 16 Equipment 17 Automobiles LIABILITIES 21 Accounts Payable 22 Unearned Rent 23 Notes Payable 24 Salaries Payable EQUITY 31 Graeme Schneider, Capital 32 Graeme Schneider, Drawing REVENUE 41 Fees Earned 42 Sales Commission EXPENSES 51 Advertising Expense 52 Automobile Expense 53 Insurance Expense 54 Rent Expense 55 Salary Expense 56 Supplies Expense 57 Utilities Expense 58 Miscellaneous Expense
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.
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
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| ASSETS | |
| 11 | Cash |
| 12 | |
| 13 | Supplies |
| 14 | Prepaid Insurance |
| 15 | Land |
| 16 | Equipment |
| 17 | Automobiles |
| LIABILITIES | |
| 21 | Accounts Payable |
| 22 | Unearned Rent |
| 23 | Notes Payable |
| 24 | Salaries Payable |
| EQUITY | |
| 31 | Graeme Schneider, Capital |
| 32 | Graeme Schneider, Drawing |
| REVENUE | |
| 41 | Fees Earned |
| 42 | Sales Commission |
| EXPENSES | |
| 51 | Advertising Expense |
| 52 | Automobile Expense |
| 53 | Insurance Expense |
| 54 | Rent Expense |
| 55 | Salary Expense |
| 56 | Supplies Expense |
| 57 | Utilities Expense |
| 58 | Miscellaneous Expense |
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issing Amount from an Account
On July 1, the cash account balance was $32,310. During July, cash payments totaled $186,540 and the July 31 balance was $31,570.
Determine the cash receipts during July.
$
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Errors affecting the
For each of the following errors, considered individually, indicate whether the error would cause the trial balance totals to be unequal. If the error would cause the trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much. If the debit and credit totals would be equal, enter zero ("0") in the amount box.
a. The payment of an insurance premium of $9,800 for a three-year policy was debited to Prepaid Insurance for $9,800 and credited to Cash for $8,900.
Indicate whether the debit or credit total is higher and by how much.
The debit total is higher by $
b. A payment of $350 on account was debited to Accounts Payable for $530 and credited to Cash for $530.
Indicate whether the debit or credit total is higher and by how much.
The debit and credit totals would be equal by $
c. A purchase of supplies on account for $2,900 was debited to Supplies for $2,900 and debited to Accounts Payable for $2,900.
Indicate whether the debit or credit total is higher and by how much.
The debit total is higher by $
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Two income statements for Vaughn Company follow:
| Vaughn Company Income Statements For the Years Ended December 31 |
|||
| 20Y1 | 20Y0 | ||
| Fees earned | $716,800 | $896,000 | |
| Operating expenses | 557,760 | 672,000 | |
| Net income | $159,040 | $224,000 |
Prepare a horizontal analysis of Vaughn Company’s income statements. Use the minus sign to indicate a decrease in the amount and percentage columns.
| Vaughn Company | ||||
| Income Statements | ||||
| For the Years Ended December 31 | ||||
| 20Y1 | 20Y0 | Amount Increase/ (Decrease) |
Percent Increase/ (Decrease) |
|
| Fees earned | $716,800 | $896,000 | $ | % |
| Operating expenses | 557,760 | 672,000 | ||
| Net income | $159,040 | $224,000 | $ |
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