QUESTION 3 (CLO 3) Mr. Donny has a habit of spending spree habit, particularly using his credit card (PB Platinum Visa Credit Card). He prefers to pay only the minimum amount each time the statement arrives. On 1* April 2020, his outstanding balance was already a whopping RM15,500. However, that did not deter him from keep on spending. On 4th April, he had bought through online purchase, a pair of jeans costing RM150, a sunglass costing RM200 and a designer shirt at RM180. On 10th April, he had purchased a smart innovative television at Samsung store and this cost RM9,600. Since it was a big amount, the store, collaborated with PB Platinum Visa offered customers who made large purchase to turn into smaller payments with an instalment payment scheme. Mr. Donny thus agreed to this instalment payment of 12 months and the first instalment was effective on the date of purchase. Other transactions that Mr. Donny paid for using his credit card were: Date Transactions RM 12 April 13 April 14 April 16 April 20 April Groceries at online Urban Fresh Lazada online Shopee online Amazon.com (e-book) at USD$30 @RM4.27 Carousell online 280 150 120 350 There was also a refund of RM250 a transaction wrongly debited to his account in March 2020. The refund would be credited to his account on 21 April 2020. Using average daily balance method including current purchases, COMPUTE the following: a) Average daily balance b) Total interest charge c) Amount of outstanding balance d) Minimum payment e) Outstanding payment after minimum payment Assume that the interest charged is 18% per annum on the unpaid balance and the minimum payment required is 5%.
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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