The following trial balance of Windsor Co. does not balance. WINDSOR CO. TRIAL BALANCE JUNE 30, 2020 Debit Credit Cash $3,083 Accounts Receivable $2,988 Supplies 1,013 Equipment 4,013 Accounts Payable 2,879 Unearned Service Revenue 1,413 Common Stock 6,213 Retained Earnings 3,213 Service Revenue 2,593 Salaries and Wages Expense 3,613 Office Expense 1,153 Totals $14,193 $17,981 Each of the listed accounts should have a normal balance per the general ledger. An examination of the ledger and journal reveals the following errors. 1. Cash received from a customer on account was debited for $570, and Accounts Receivable was credited for the same amount. The actual collection was for $750. 2. The purchase of a computer printer on account for $713 was recorded as a debit to Supplies for $713 and a credit to Accounts Payable for $713. 3. Services were performed on account for a client for $890. Accounts Receivable was debited for $890 and Service Revenue was credited for $89. 4. A payment of $50 for telephone charges was recorded as a debit to Office Expense for $50 and a debit to Cash for $50. 5. When the Unearned Service Revenue account was reviewed, it was found that service revenue amounting to $538 was performed prior to June 30 (related to Unearned Service Revenue). 6. A debit posting to Salaries and Wages Expense of $883 was omitted. 7. A payment on account for $206 was credited to Cash for $206 and credited to Accounts Payable for $260. 8. A dividend of $788 was debited to Salaries and Wages Expense for $788 and credited to Cash for $788. Prepare a correct 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.
The following
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WINDSOR CO.
TRIAL BALANCE JUNE 30, 2020 |
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Debit
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Credit
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|||||
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Cash
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$3,083 | |||||
|
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$2,988 | |||||
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Supplies
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1,013 | |||||
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Equipment
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4,013 | |||||
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Accounts Payable
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2,879 | |||||
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Unearned Service Revenue
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1,413 | |||||
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Common Stock
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6,213 | |||||
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3,213 | |||||
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Service Revenue
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2,593 | |||||
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Salaries and Wages Expense
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3,613 | |||||
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Office Expense
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1,153 | |||||
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Totals
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$14,193
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$17,981
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Each of the listed accounts should have a normal balance per the general ledger. An examination of the ledger and journal reveals the following errors.
| 1. | Cash received from a customer on account was debited for $570, and Accounts Receivable was credited for the same amount. The actual collection was for $750. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2. | The purchase of a computer printer on account for $713 was recorded as a debit to Supplies for $713 and a credit to Accounts Payable for $713. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3. | Services were performed on account for a client for $890. Accounts Receivable was debited for $890 and Service Revenue was credited for $89. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4. | A payment of $50 for telephone charges was recorded as a debit to Office Expense for $50 and a debit to Cash for $50. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5. | When the Unearned Service Revenue account was reviewed, it was found that service revenue amounting to $538 was performed prior to June 30 (related to Unearned Service Revenue). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 6. | A debit posting to Salaries and Wages Expense of $883 was omitted. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7. | A payment on account for $206 was credited to Cash for $206 and credited to Accounts Payable for $260. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8. |
A dividend of $788 was debited to Salaries and Wages Expense for $788 and credited to Cash for $788. Prepare a correct trial balance.
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