The following trial balance has been drawn up from the accounts of the endpages bookshop End pages Bookshop Trial Balance as at 31Dec 2002 DR (SHS] CR (SHS) sales 151,500 purchases 103,500 salaries & wages 18,700 office expenses 2,500 insurance 1,100 Electricity 600 stationery 2400 Advertising 3500 Telephone 800 Rates 3000 Discount allowed 100 discount received 200 rent received 2000 returns inwards 1500 returns outwards 3500 stock as at 1st Jan 2001 46000 fixtures & fittings 5000 Debtors & creditors 4800 7500 cash in Hand 200 Cash in Bank 12000 Capital 11,000 Drawings stock as at 31st Dec 2001 41,000 328,700 328,700 Required: Prepare a statement of comprehensive income for the year ended 31st Dec 2002 and a statement of financial position as at that date
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
End pages Bookshop
Trial Balance as at 31Dec 2002
| DR (SHS] | CR (SHS) | |
| sales | 151,500 | |
| purchases | 103,500 | |
|
salaries & wages
|
18,700 | |
| office expenses | 2,500 | |
| insurance | 1,100 | |
| Electricity | 600 | |
| stationery | 2400 | |
| Advertising | 3500 | |
| Telephone | 800 | |
| Rates | 3000 | |
| Discount allowed | 100 | |
| discount received | 200 | |
| rent received | 2000 | |
| returns inwards | 1500 | |
| returns outwards | 3500 | |
| stock as at 1st Jan 2001 | 46000 | |
| fixtures & fittings | 5000 | |
| Debtors & creditors | 4800 | 7500 |
| cash in Hand | 200 | |
| Cash in Bank | 12000 | |
| Capital | 11,000 | |
| Drawings | ||
| stock as at 31st Dec 2001 | 41,000 | |
| 328,700 | 328,700 |
Required:
Prepare a statement of comprehensive income for the year ended 31st Dec 2002 and a
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