Record the effect, if any, of the transaction entry or adjusting entry on the appropriate balance sheet category or on the income statement by entering the account name and amount and indicating whether it is an addition (+) or subtraction (-). Column headings reflect the expanded balance sheet equation; items that affect net income should not be shown as affecting stockholders' equity. The first transaction is provided as an illustration. A. During the month, Supplies Expense was debited $2,600 for supplies purchased. The cost of supplies used during the month was $1,900. Record the adjustment to properly reflect the amount of supplies used and supplies still on hand at the end of the month. B. During the month, the board of directors declared a cash dividend of $14,400, payable next month. C. Employees were paid $10,500 in wages for their work during the first three weeks of the month. D. Employee wages of $3,600 for the last week of the month have not been recorded. E. Revenues from services performed during the month totaled $22,200. Of this amount, $9,300 was received in cash, and the balance is expected to be received within 30 days. F. A contract was signed with a newspaper for a $1,200 advertisement; the ad ran during this month but will not be paid for until next month. G. Merchandise that cost $4,650 was sold for $8,800. Of this amount, $3,300 was received in cash, and the balance is expected to be received within 30 days. H. Independent of transaction a, assume that during the month, supplies were purchased at a cost of $1,230 and debited to the Supplies (asset) account. A total of $990 of supplies were used during the month. Record the adjustment to properly reflect the amount of supplies used and supplies still on hand at the end of the month. I. Interest of $540 has been earned on a note receivable but has not yet been received. J. Issued 1,200 shares of $10 par value common stock for $26,400 in cash.
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.
Step by step
Solved in 3 steps
