The following transactions occurred in the business during the month of July 2021. 5-Jul Provided service for $6,000 and received 30% cash. The remaining balance is on credit. 7-Jul The owner withdrew $2,000 from the business bank account. $800 was used to pay the business’s electricity expense. The owner used the remaining cash to buy a computer for personal use. 12-Jul Received $2,500 cash for services provided and recorded last month. 17-Jul Paid $5,500 wages expense recorded last month. 25-Jul Provided services for $7,000 cash received and recorded last month. 28-Jul The owner contributed a vehicle costing $25,000 and equipment costing $8,000. 30-Jul Paid $5,000 to the supplier for supplies purchased and received last month. Prepare the general journal for the above transactions. Narration and dates are required.
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 following transactions occurred in the business during the month of July 2021.
| 5-Jul | Provided service for $6,000 and received 30% cash. The remaining balance is on credit. |
| 7-Jul | The owner withdrew $2,000 from the business bank account. $800 was used to pay the business’s electricity expense. The owner used the remaining cash to buy a computer for personal use. |
| 12-Jul | Received $2,500 cash for services provided and recorded last month. |
| 17-Jul | Paid $5,500 wages expense recorded last month. |
| 25-Jul | Provided services for $7,000 cash received and recorded last month. |
| 28-Jul | The owner contributed a vehicle costing $25,000 and equipment costing $8,000. |
| 30-Jul | Paid $5,000 to the supplier for supplies purchased and received last month. |
Prepare the general journal for the above transactions. Narration and dates are required.
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