Sato Inspection Services is in its second month of operations. You have been given the following journal entries regarding its January 2017 transactions. Required a. Set up the following accounts (use the balance column format) entering the opening balances brought forward from the end of last month, December 31, 2016: Cash (101) $850; Accounts Receivable (106) $300; Equipment (167) $1,500; ACcounts Payable (201) $325; Toshi Sato, Capital (301) $2,325; Toshi Sato, Withdrawals (302) $300; Revenue (401) $1,800; and Salaries Expense (622) $1,500. b. Post the journal entries to the accounts and enter the balance after each posting. Page 127 General Journal Page 1 Date Account Titles and Explanation PR Debit Credit 2017 Jan. 1 Cash.. 3,500 Toshi Sato, Capital.. 3,500 Addtional owner Investment. 12 Accounts Receivable . 9.000 Revenue . q,000 Performed work for a customer on account 20 Equipment.. 12,000 Accounts Payable. 10.000 Cash. 2,000 Purchased equ'pment by paylng cash and the balance on credit 31 Cash . 5,000 Accounts Receivable 5,000 Collected cash from credit customer. 31 Salaries Expense Cash. 3,000 3,000 Pald month-end salarfes. 31 Toshi Sato, Withdrawals. 750 Cash.. 750 Toshi Sato withdrow cash for personal use.
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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