Prepare journal entries to record the following transactions of Recycled Fashion retail store. Recycled Fashion uses a perpetual inventory system and the gross method. Mar. 3 Purchased $1,150 of merchandise made from recycled material from GreenWorld Company with credit terms of 2∕15, n∕60, invoice dated March 3, and FOB shipping point. 4 Paid $75 cash for shipping charges on the March 3 purchase. 5 Returned to GreenWorld unacceptable merchandise that had an invoice price of $150. 18 Paid GreenWorld for the March 3 purchase, net of the discount and the returned merchandise. 19 Purchased $425 of fair trade merchandise from PeopleFirst Corp. with credit terms of 1∕10, n∕30, invoice dated March 19, and FOB destination. 21 After negotiations, received from PeopleFirst a $25 allowance (for scuffed merchandise) toward the $425 owed on the March 19 purchase. 29 Sent check to PeopleFirst paying for the March 19 purchase, net of the allowance and the discount.
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.
Prepare
Fashion uses a perpetual inventory system and the gross method.
Mar. 3 Purchased $1,150 of merchandise made from recycled material from GreenWorld Company
with credit terms of 2∕15, n∕60, invoice dated March 3, and FOB shipping point.
4 Paid $75 cash for shipping charges on the March 3 purchase.
5 Returned to GreenWorld unacceptable merchandise that had an invoice price of $150.
18 Paid GreenWorld for the March 3 purchase, net of the discount and the returned merchandise.
19 Purchased $425 of fair trade merchandise from PeopleFirst Corp. with credit terms of 1∕10,
n∕30, invoice dated March 19, and FOB destination.
21 After negotiations, received from PeopleFirst a $25 allowance (for scuffed merchandise) toward
the $425 owed on the March 19 purchase.
29 Sent check to PeopleFirst paying for the March 19 purchase, net of the allowance and the discount.
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