Problem 1: Ibrahim has the following transaction for his business in August 2016. August 1. August 2. The owner invested OMR 80,000. Ibrahim bought computers by cash for OMR 2,000. He paid OMR 400, and the remaining amount will be paid in the future. Ibrahim purchased a car by cash, OMR 8,000. Ibrahim paid the creditors OMR 1,600, for the computers bought on August 2. The company billed client for accounting services on account, OMR 6,000 Supplies were purchased on account, OMR 650. August 12. The company received cash from clients billed previously on Augu 8, OMR 6,000 Ibrahim received an invoice for office equipment repair services from Office Ext (the invoice will be paid next month), OMR 850, Ibrahim paid monthly salaries OMR 2,700. Utilities expense were paid OMR 280. Miscellaneous expenses were paid, OMR 350. Ibrahim paid the creditors OMR 650, for the supplies bought on August 10. August 4. August 6. August 8. August 10. August 12. August 15. August 20. August 22. August 25. August 27.
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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