Question-1: Ready-Set-Go Co. distributes suitcases to retail stores and extends credit terms of 1/10, n/30 to all of its customers. At the end of June, Ready-Set-Go's inventory consisted of suitcases costing Tk.1,200. During the month of July, the following merchandising transactions occurred. July 1 Purchased suiteases on account for Tk.1,500 from Trunk Manufacturers, FOB destination, terms 2/10, n/30. The appropriate party also made a cash payment of Tk.100 for freight on this date. July 3: Sold suitcases on account to Satchel World for Tk.2,200. The cost of suitcases sold is Tk.1,400. July 9: Paid Trunk Manufacturers in full. July 12: Received payment in full from Satchel World. July 17: Sold suitcases on account to Lady GoGo for Tk.1,400. The cost of the suitcases sold was Tk.1,010. July 18: Purchased suiteases on account for Tk.1,900 from Holiday Manufacturers, FOB shipping point, terms 1/10, n/30. The appropriate party also made a cash payment of Tk.125 for freight on this date. July 20: Received Tk.300 credit (including freight) for suitcases returned to Holiday Manufacturers. July 21: Received payment in full from Lady GoGo. July 22: Sold suiteases on account to Vagabond for Tk.2,250. The cost of suitcases sold was Tk.1,350. July 30: Paid Holiday Manufacturers in full. July 31: Granted Vagabond Tk.200 credit for suiteases retumed costing Tk.120. Instructions Journalize the transactions for the month of July for Ready-Set-Go using a perpetual inventory system.
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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