The Midoriya Security Services began operation on January 1, 2020. At the end of the first year of operations, the unadjusted trial balance shows the following: Midoriya Security Services Unadjusted Trial Balance December 31, 2020 Debit P 12, 400 3, 200 3, 600 58, 000 Credit Cash Accounts Receivable Prepaid Insurance Automobiles P 45, 000 2, 500 18, 000 84, 000 Notes Payable Unearned Revenue Midoriya, Capital Service Revenue Salaries expense Repair expense Gas and oil expenses ТОTAL 57, 000 6, 000 9, 300 P 149, 500 P 149, 50 Additional information: a. Services provided but unbilled P2, 500 at December 31. b. Insurance coverage began January 1 under a 2- year policy. c. Automobile depreciation is P15, 000 for the year. d. Interest of P5, 4000 accrued on notes payable for the year. e. P1, 000 of the unearned fees has been earned. f. Driver's salaries total P500 per day. At December 31, 3 days salaries are unpaid. g. Repairs to automobiles of P650 have been incurred, but bills have not been received prior to December 31. (Use accounts payable) Instructions: 1. Prepare the adjusting entries at December 31, 2020. Adjusting Entry h) Credit Debit а. b. с. d. е. f. g.
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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