Prepare the journal entries to record the following transactions on Cullumber Company's books using a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) (a) On March 2, Cullumber Company sold $890,100 of merchandise to Oriole Company, terms 2/10, n/30. The cost of the merchandise sold was $546,300. On March 6, Oriole Company returned $105,400 of the merchandise purchased on March 2. The cost of the merchandise returned was $62,600. On March 12, Cullumber Company received the balance due from Oriole Company. (b) (c) No. Date Account Titles and Explanation Debit Credit (a) March 2 + Accounts Receivable 890,100 Sales Revenue 890,100 (To record sale of merchandise) March 2 + Cost of Goods Sold 546,300 Inventory 546,300 (b) March 6 + Sales Returns and Allowances 105,400 Accounts Receivable 105,400 (To record return of merchandise) March 6 + Inventory 62,600 Cost of Goods Sold 62,600 (c) March 12 Cash 791,600 Sales Discounts 15,832 Accounts Receivable 775,768
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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