Problem #15 Correcting a Trial Balance Below is the trial balance of Gualberto Magdaraog Repair Service, which does not balance: The following information is obtained from a review of the record keeping process: a. An account receivable for P19,600 was incorrectly added as P16,900 when computing the balance of the Accounts Receivable account. b. A debit posting from the journal for P5,200 is missing from the Advertising Expense account. c. A credit posting of P15,000 to Notes Payable should have been made to Accounts Payable. d. A debit posting of P34,000 to Supplies was incorrectly posted as P3,400. e. Credits to the ledger Accounts Payable account were under-footed by P60,000. f. Revenues are overstated in the ledger account by P40,000. g. A credit posting for Repair Revenues from the journal in the amount of P63,600 is missing. h. Supplies acquired in the amount of P17,400 have been incorrectly posted to the Office Equipment account. Required: Prepare a corrected 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.
Problem #15
Correcting a
Below is the trial balance of Gualberto Magdaraog Repair Service, which does not
balance:
The following information is obtained from a review of the record keeping process:
a. An account receivable for P19,600 was incorrectly added as P16,900 when
computing the balance of the
b. A debit posting from the journal for P5,200 is missing from the Advertising Expense
account.
c. A credit posting of P15,000 to Notes Payable should have been made to Accounts
Payable.
d. A debit posting of P34,000 to Supplies was incorrectly posted as P3,400.
e. Credits to the ledger Accounts Payable account were under-footed by P60,000.
f. Revenues are overstated in the ledger account by P40,000.
g. A credit posting for Repair Revenues from the journal in the amount of P63,600 is
missing.
h. Supplies acquired in the amount of P17,400 have been incorrectly posted to the
Office Equipment account.
Required: Prepare a corrected trial balance.
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