The following balances have been taken from the unadjusted trial balance of Burwood Electric Services as at 30 June 2016. Debit $ Credit $ 13,000 Rent Expense Office Supplies 3,690 Insurance Expense 3,300 Unearned Revenue 6,200 Office Equipment 10,000 Accumulated Depreciation- 6,000 Office Equipment Following additional information is available for which no adjusting entries have been made: (1) Depreciation of $1,500 has to be provided for the office equipment for the year ended 30 June 2016. (ii) Insurance Expense of $3,300 does not include $300 payable for the month of June 3016. Office Supplies worth $500 were still on hand as at 30 June 2016. (iii) (iv) Rent expense of $13,000 includes $1,000 paid for the month of July 2016. (V) Unearned revenue of $6,200 includes $5,000 for services completed by 30 June 2016. Bank interest $500 payable for June 2016 has not been recorded in the books. (vi) Required: Prepare the general journal entries required to make necessary adjustments. Include narrations.
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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