QUESTION ONE The following trial balance was extracted from the books of Mkulima on 30 April 2017. All amounts are TRIAL BALANCE Details Sales Purchases Stock 1 May 2016 Carriage outwards Carriage Inwards Return Inwards Return outwards Salaries and wages Motor expenses Rent Sundry expenses Motor vehicles Fixture and fittings Debtors Creditors Cash at bank Cash in hand Drawings Capital REQUIRED: (0) (11) Debit 11,570,000 3,776,000 326,000 234,000 440,000 2,447,000 664,000 576,000 1,202,000 3,400,000 600,000 4,577,000 3,876,000 120,000 2,050,000 35,858,000 Credit 18,614,000 Prepare his Income statement for the year ending 30 April 2017 Statement of financial position as at that date 355,000 Additional Information: Closing stock amounted to TZS 4,000,000. Depreciation is to be charged at rates of 10% on cost for Fixtures and Fittings and 25% on cost for Motor Vehicles. Bad debts of TZS 800,000 are to be written-off. 3,045,000 13,844,000 35,858,000
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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