The following was the trial balance extract from ABC Trading as at 31 March 2019. Particulars DEBIT (RM) CREDIT (RM) Purchases and Sales 22,860 41,000 Inventory on 1 April 2018 5,100 Capital 8,170 Bank overdraft 4,300 Cash 140 Discount allowed and received 1,440 930 Returns inwards and outwards 790 570 Carriage outwards 2,180 Office expenses 450 Fixtures and fittings 1,210 Delivery van 2,000 Accounts receivables and account payables 11,900 6,720 Rent and insurance 1,790 Drawings 2,850 Wages and salaries 8,980 TOTAL 61,690 61,690 Additional information as at 31 March 2019: Inventory on 31 March 2019 was RM4,250 Wages and salaries accrued as at 31 march 2019 was RM210; outstanding office expenses was RM30 Rent and insurance prepaid was RM150 Required: Prepare the Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 March 2019
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 was the
trial balance extract from ABC Trading as at 31 March 2019.
|
Particulars |
DEBIT (RM) |
CREDIT (RM) |
|
Purchases and Sales |
22,860 |
41,000 |
|
Inventory on 1 April 2018 |
5,100 |
|
|
Capital |
8,170 |
|
|
Bank overdraft |
4,300 |
|
|
Cash |
140 |
|
|
Discount allowed and received |
1,440 |
930 |
|
Returns inwards and outwards |
790 |
570 |
|
Carriage outwards |
2,180 |
|
|
Office expenses |
450 |
|
|
Fixtures and fittings |
1,210 |
|
|
Delivery van |
2,000 |
|
|
Accounts receivables and account payables |
11,900 |
6,720 |
|
Rent and insurance |
1,790 |
|
|
Drawings |
2,850 |
|
|
Wages and salaries |
8,980 |
|
|
TOTAL |
61,690 |
61,690 |
Additional information as at 31 March 2019:
- Inventory on 31 March 2019 was RM4,250
- Wages and salaries accrued as at 31 march 2019 was RM210; outstanding office expenses was RM30
- Rent and insurance prepaid was RM150
Required:
- Prepare the Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 March 2019
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