Q2) Presented below are selected accounts from the adjusted trial balance ($ Millions) for Jericho Industries for June 30 of the current year. Debit $895 1425 Credit Accounts Receivable-trade Building and Equipment Cash in Bank-operating Interest Receivable 76 60 Installment Receivables Merchandise Inventory Land 120 100 600 475 Notes Receivable-long term Petty Cash Prepaid Expenses -current Supplies Patent 12 46 28 85 Accounts Payable-Trade Accumulated Depreciation Additional Paid in Capital 710 375 725 95 Allowance for Uncollectible Accounts Cash Dividends Payable Common Stock-$1 par value Income Tax Payable Notes Payable-2 years Retained Earnings Unearned Revenues-2 years Cash Dividends Declared Income Summary 50 90 105 1000 85 125 200 762 $4122 $4122 Prepare classified balance sheet at Jun ,30, 2021 TOTALS
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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