The following is Baker Co.'s Pre-Closing Trial Balance as of December 31, 2017. Baker's accounting period is a month, thus the balances in the temporary accounts are for the month of December 2017. Account Debit Credit Cash 10,000 Accounts Receivable 25,000 Inventory 40,000 Supplies 5,000 Equipment 100,000 Accumulated Depreciation 30,000 Accounts Payable 12,000 Note Payable 13,000 Interest Payable 3,000 Unearned Revenue 8,000 Dividends Payable 7,000 Common Stock 10,000 Retained Eamings 46,000 Sales Revenue 193.000 Cost of Goods Sold 78,000 Depreciation Expense 18.000 Wages Expense 42,000 Supplies Expense 3.000 Interest Expense 1.000 Total 322,000 322,000 Use the information in Baker's Trial balance to answer questions D through H. D. In the General Journal below record the journal entry that should be made to close the Revenue account(s).
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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