Problems P-1. The following account balances were included in the adjusted trial balance of Interger Advisory Corporation at November 30, 2021. Accounts are listed in alpahbetical order and all have normal balances. Accumuated depreciation, office equipment Accumuated depreciation, sales equipment Accumuated Other Comprehensive Income 50,000 160,000 324,000 Allowance for doubtful accounts 5,000 Cost of goods sold 3,000,956 Common shares 908,000 Depreciation, office equipment 20,300 Depreciation, sales equipment Depreciation, understatement due to error - 2020 Dividend revenue 13,944 49,560 106,400 Dividends declared on common shares 25,200 Entertainment expense 41,496 Freight out 81,004 Gain on sale of land 156,800 Interest expense Loss on disposal of discontinued operations - Pasay Division Miscellaneous operating administrative expenses Retained earnings Salaries and wages expense - office staff 50,400 98,000 13,202 431,200 157,528 Sales commission expense 273,280 Sales discounts 42,000 Sales returns and allowances 174,440 Sales revenue 5,399,800 9,660 Supplies expense (administrative) Telephone and internet expense (administrative) Telephone and internet expense (sales) 7,896 25,284
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.
Step by step
Solved in 2 steps with 3 images
