The first image shows the unadjusted trial balance of Dodot Laundry Service. 1st Step: Perform adjusting entry, adjust the account titles that need to be adjusted from the unadjusted trial balance of Dodot Laundry Sevice First is to create a problem or a transaction that requires an adjustment, just like in picture no. 2 (note that picture no. 2 is not related to Dodot laundry service, it is just a sample adjusting journal entry transaction for adjusting accrued revenue) You can create whatever problem you want for as long as you're able to adjust what needs to be adjusted. 2nd Step: After adjusting and creating transactions, make an adjusted trial balance 3rd Step: After the adjusted trial balance, perform closing entries by closing all the temporary accounts from the adjusted trial balance which are the revenue, expenses, income summary, and drawings. 4th Step: After closing all the temporary accounts, create a post-closing trial balance
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.
The first image shows the unadjusted
1st Step: Perform
First is to create a problem or a transaction that requires an adjustment, just like in picture no. 2 (note that picture no. 2 is not related to Dodot laundry service, it is just a sample adjusting
2nd Step: After adjusting and creating transactions, make an adjusted trial balance
3rd Step: After the adjusted trial balance, perform closing entries by closing all the temporary accounts from the adjusted trial balance which are the revenue, expenses, income summary, and drawings.
4th Step: After closing all the temporary accounts, create a post-closing trial balance
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