Problem 1. Mr. Amer started his Car Repair Business in Muscat in June 2020. During the month of June, the following transactions occurred: Amer opened the business by investing OMR 300,000. Purchased Computers for OMR 3,500 and immediately paid OMR 2,000 cash and promised the supplier to pay the remaining amount in the future. June 1 June 2 Purchased supplies on account for OMR 10,500. Provided repair service to a customer, OMR 7,600. The customer paid OMR 3,000 and the remaining will be paid in the near future. June 5 June 6 Paid the remaining amount of OMR 1500 for the Computers bought June 2nd. Provided repair service to a customer on account, OMR 40,000. Purchased Computer Equipment by cash, OMR 15,000 Received cash from the customer who was billed on June 15th, OMR 40,000. Received cash from the customer who was billed on June 6th, OMR 4,600. June 10 June 15 June 16 June 23 June 24 June 30 Paid the Internet bill OMR 450 Amer paid monthly rent, OMR 550. Paid the Electricity bill, OMR 360 June 30 June 30 Prepare the unadjusted trial balance for Mr. Asif as of June 30th 2020. Required: 1. Prepare journal 2. Prepare ledger 3. Prepare unadjusted trial balance
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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Purchased supplies on account for OMR 10,500. |
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June 6 |
Provided repair service to a customer, OMR 7,600. The customer paid OMR 3,000 and the remaining will be paid in the near future. |
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June 10 |
Paid the remaining amount of OMR 1500 for the Computers bought June 2nd. |
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June 15 |
Provided repair service to a customer on account, OMR 40,000. |
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June 16 |
Purchased Computer Equipment by cash, OMR 15,000 |
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June 23 |
Received cash from the customer who was billed on June 15th, OMR 40,000. |
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June 24 |
Received cash from the customer who was billed on June 6th, OMR 4,600. |
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June 30 |
Paid the Internet bill OMR 450 |
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June 30 |
Amer paid monthly rent, OMR 550. |
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June 30 |
Paid the Electricity bill, OMR 360 |
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