Record Adjusting Entries as of 30/6/2022 entries for the following transactions. Use account names as appropriate, and you must include appropriate narration for each journal. (Hint: Do not simply write the narration in just a few words "Balance Day adjustments" which is not enough. Appropriate narration must be meaningful and relevant to the journal entry recorded.) Transactions: 1. Wages to be accrued for 30 June - $1,000 2. Interest earned but not yet received for June - $550 3. Record Insurance paid as a prepayment on 1/6/2022. The amount of $2,400 (ignore GST) was paid for 12 months of coverage commencing 1/6/2022. 4. Fee income received of $5,000 in June was for services yet to be provided. 5. Depreciation on Motor Vehicles for the year was calculated to be $4,500. 6. Annual Leave provision balance is to be $11,000 on 30/6/2022. The opening balance was $5,000 at 1/7/2021 and the payments to employees during the financial year ended 30/6/2022 were $4,500.
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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