Sammi started her business on 1 January 2021 called Trendy. You are required to prepare the GENERAL JOURNAL for the following transactions of Trendy for the first month of operations. Jan 01 Sammi invested RM50, 000 cash into the business. Jan 02 Trendy purchased used motor vehicle for RM20,000. Jan 08 Trendy paid rent for RM4, 000. Jan 08 Trendy completed work for a client and immediately received RM15, 000. Jan 12 Sammi signed a RM50,000 small business loans with CIMB Bank under Trendy’s name. Jan 15 Ideal Homes renovated and installed fixtures and fittings at a cost of RM3, 000. Trendy will pay the bill at a later date. Jan 15 Trendy paid RM1, 000 cash for advertisement in a local magazine. Jan 28 Trendy completed work for another client on credit and invoiced the client RM5, 000. The client is allowed to settle the bill within 30 days. Jan 30 Trendy paid Ideal Homes that installed the fixtures and fittings earlier. Jan 30 Trendy paid RM150 for usage of electricity for the month.
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.
Sammi started her business on 1 January 2021 called Trendy. You are required to prepare the GENERAL JOURNAL for the following transactions of Trendy for the first month of operations.
Jan 01
Sammi invested RM50, 000 cash into the business.
Jan 02
Trendy purchased used motor vehicle for RM20,000.
Jan 08
Trendy paid rent for RM4, 000.
Jan 08
Trendy completed work for a client and immediately received RM15, 000.
Jan 12
Sammi signed a RM50,000 small business loans with CIMB Bank under Trendy’s name.
Jan 15
Ideal Homes renovated and installed fixtures and fittings at a cost of RM3, 000. Trendy will pay the bill at a later date.
Jan 15
Trendy paid RM1, 000 cash for advertisement in a local magazine.
Jan 28
Trendy completed work for another client on credit and invoiced the client RM5, 000. The client is allowed to settle the bill within 30 days.
Jan 30
Trendy paid Ideal Homes that installed the fixtures and fittings earlier.
Jan 30
Trendy paid RM150 for usage of electricity for the month.
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