The following transactions were extracted from the books of Kwabeng enterprise for February 2020 February Commenced business with a capital of GHC15,000 cash Purchased good GHC6,000 Purchased goods on credit from S & Co. GHC3,000 03 0s 07 10 Purchased furniture GHC2,400 Returned goods to S & Co. GHC600. Sold goods GHC3,900 Received an invoice from Smith GHC5,000 10 11 12 Sold goods on credit to DD GHC2,250 Paid salaries GHC960 15 20 22 Purchased a van GHE50,000 on credit from Silver Star Auto Ltd. 24 Received commission GHC75 Goods returned by DD GHC450 Received cash from DD GHC1,500 25 25 26 Paid to S & Co. GHC1,800 Withdrew from business GHC900 for personal use Borrowed from KK GHC1,500 27 28 Required: 1. Record the above transactions in the appropriate journals 2. Post entries to relevant ledger accounts a. Prepare a 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.
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