started business with 100,000 in cash and 50,000 inventory Received bank loan 500,000 Purchase merchandise 100,000, paid 20,000 in cash and remaining amount will be paid next month Return merchandise to suppliers 5,000 Purchase office supplies 10,000 Paid six month advance rent RS 120,000 Paid salary expense 100,000 Received six month advance fees RS.150,000 Sales merchandise RS 250,000 on account Received from customer 100,000 Return merchandise from customer’s RS. 3,000 Purchase furniture on accounts Adjustment data
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.
- started business with 100,000 in cash and 50,000 inventory
- Received bank loan 500,000
- Purchase merchandise 100,000, paid 20,000 in cash and remaining amount will be paid next month
- Return merchandise to suppliers 5,000
- Purchase office supplies 10,000
- Paid six month advance rent RS 120,000
- Paid salary expense 100,000
- Received six month advance fees RS.150,000
- Sales merchandise RS 250,000 on
account - Received from customer 100,000
- Return merchandise from customer’s RS. 3,000
- Purchase furniture on accounts
Adjustment data
- Salary expense at the end of the year 95,000
- Prepaid rent at the end of year 20,000
- Unearned fees at the end of year 10,000
- Inventory at the end of the year 35,000
Required
1. Pass general entries in standard form
2. Prepare T accounts
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