"Print brother CO." as a new business on May 1st, 2014. Here are the transactions for the month of May: May 1 Owner invested $55,000 cash into the business in exchange for common stock. May 3 Purchased a new printing equipment for $20,000 with $10,000 cash and the rest on a loan from the bank. May 5 Paid for a 4-month liability insurance upfront for $900 May 6 Purchased printing supplies for $1000 on account. May 10 Paid the May rent for $2,000 May 15 Performed printing services and billed customer for $5,500 May 20 Paid $6,000 on the balance due for the equipment purchased on May 3 May 25 Performed printing service for $5,200 and collected cash payment May 30 Paid employees' salaries for $9,990 May 30 Received full payment from customer billed on May 15 Instructions: 1) Journalize the May transactions
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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