Sales revenue is generated by the sale of inventory. Companies can choose between the perpetual and the periodic system to account for the inventory. Please discuss the difference between the two accounting processes and explain how one would be the best choice for a company that makes Televisions. Discuss the reason why one accounting method might be preferred over the other or could both be used properly for a company that makes televisions. What factors were used to determine the best choice supporting your selection. Provide another product that would best be accounted for using the system you did not select and explain what features of the product or merchandise, in your opinion, are the drivers for the opposite method.
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.
Sales revenue is generated by the sale of inventory. Companies can choose between the perpetual and the periodic system to account for the inventory.
Please discuss the difference between the two accounting processes and explain how one would be the best choice for a company that makes Televisions.
Discuss the reason why one accounting method might be preferred over the other or could both be used properly for a company that makes televisions.
What factors were used to determine the best choice supporting your selection. Provide another product that would best be accounted for using the system you did not select and explain what features of the product or merchandise, in your opinion, are the drivers for the opposite method.
Introduction:
All product and service sales are included in sales revenue, although they are not necessarily counted in real-time. In June, Roosevelt's sold and got payment for 40 bears at a cost of $25 each, for a total of $1,000. Let's assume that Roosevelt also repaired five bears for $20 each. Customers paid for the bears that were repaired, but they won't be returned to them until July. Sales for those five bears' services cannot be included on June's books under accrual-based accounting. When the bear is delivered to the client, that revenue must be recorded. Deferred income is the term for this.
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