Rozel Design Income Statement Rozel Design December 31,2020 Adjust Trial Balance Revenues December 31,2020 Sales Revenue 85 600 Cash 91 826 Service Revenue 1530 Inventory 15 995 Supplies Buildings Total Revenue 87 130 2 500 70 000 Less : Sales Discount 659 Account Receivable 650 Net Sales 86 471 Account Payable Owner Capital 103 000 Cost of Goods Sold 62 400 100 000 Gross Profit 24 071 Equipment 800 Prepaid Insurance 550 Operating Expenses Vehicle 30 000 Rent Expense 3 000 Sales Revenue 85 600 Salaries and Wages Expense 5 300 Sales Discounts 659 Utilities Expense 3 150 Service Revenue 1530 Supplies Expense 3 500 Cost of Goods Sold 62 400 Depreciation Expense 200 Rent Expense 3 000 Insurance Expense 50 Salaries and Wages Expense 5 300 Advertising Expense 600 Utilities Expense 3 150 Total Operating Expense 15 800 Supplies Expense 3 500 Net Income RM 8 271 Depreciation Expense 200 Insurance Expense 50 Accumulated Depreciation- Rozel Design 200 Equipment Owners' Equity Statement Utilities payable 350 December 31,2020 Salaries and wages payable 500 Owners' Capital December 1, 2020 107 791 Net Income 8 271 Advertising Expense 600 Owners' Capital December RM 116 062 291 180 291 180 31,2020
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.
a) closing entries
b) post to closing
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