Question: Prepare income statement and balance sheet. Cash 426500 Rent expense 2000 Accumulated depreciation 500 Depreciation 500 Insurance expense 10000 Dividend account 2000 Office supplies 1000 Preferred share capital 2500 Drawings 2000 Machinery 2000 Interest payable 3000 Interest expense 3000 Outstanding salary - - Equity share capital 1000 Sales 1500 Utility expense 1000 Telephone expense 500 Furniture 2000 Salaries expense 1500 Accounts receivables 2000 Service revenue 15000 Advertising expense 7000 Office equipment 5000 Unearned revenue 2500 Wages expense 20000 Purchases account 400000 Account payables 1000 Prepaid rent - - Prepaid insurance - - Total 457500 457500
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.
Question: Prepare income statement and
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Cash |
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426500 |
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Rent expense |
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2000 |
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|
|
|
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500 |
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Depreciation |
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500 |
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Insurance expense |
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10000 |
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Dividend account |
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2000 |
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Office supplies |
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1000 |
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2500 |
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Drawings |
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2000 |
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Machinery |
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2000 |
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Interest payable |
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3000 |
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Interest expense |
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3000 |
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Outstanding salary |
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- |
- |
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Equity share capital |
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1000 |
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Sales |
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1500 |
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Utility expense |
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1000 |
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Telephone expense |
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500 |
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Furniture |
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2000 |
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Salaries expense |
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1500 |
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2000 |
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Service revenue |
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15000 |
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Advertising expense |
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7000 |
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Office equipment |
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5000 |
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Unearned revenue |
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2500 |
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Wages expense |
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20000 |
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Purchases account |
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400000 |
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Account payables |
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1000 |
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Prepaid rent |
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- |
- |
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Prepaid insurance |
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- |
- |
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Total |
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457500 |
457500 |
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