Sunflower Wholesale Company For the month ended August 1, 2015 The following transactions took place during the month of August. Unadjunted Trial Balance Debit (P) a Owrers invested P50,000 cash in the corporation in exchange for 5,000 shares of equity capal D. Equioment was purchased for P20,000 cash. e On the first day of August, P6,000 rent on a building was paid for the months of August and September a. Merchandise costing P38.000 was purchased on account (The company uses the perpetual inventory system). e P30,000 was borrowed from a local bank, and a note payable was signed 1 Credit saies for the month were P40,000. The cost of merchandise sold was P22.000 9 P15,000 was collected on account from customers. h. P20,000 was paid on account to suppliers of merchandise. i Salaries of P7,000 were paid to employees for August i Abil for P2.000 was received from local utity company for the month of August. k P20,000 cash was loaned to another company, evidenced by a note receivable. L The corporation paid its shareholders a cash dividend of P1,000. Particulars CreditP 21000 25,000 Cash Accounts Receivable Prapaid Tent 6.000 16.000 Merchandise inventory Notes Receivable 20,000 Equipment Accounts Payable 20,000 18,000 2,000 Ulities Payabale Notes Payable 30,000 50,000 Share Capital Dividends 1000 Sales 40,000 22.000 Cots of goods sold Salaries Expense 7,000 2.000 Ublities Expense 140,000 140,000
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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