The Picture Perfect Camera Shop had the following transactions for the month of August 20X1. Aug. 1 Purchased cameras for $3,400 plus a freight charge of $150 from the Mason Company, Invoice 532, dated July 29, net payable in 60 days. 6 Purchased color film for $470 from Digital Products, Invoice 989, dated August 4, net payable in 30 days. 10 Purchased camera cases for $920 from Raven Leathers, Invoice 668, dated August 8; terms are 2/10, n/30. 15 Returned defective cameras to Mason Company and received Credit Memorandum 205 for $530. The cameras were originally purchased on Invoice 532 of July 29. 20 Purchased cameras for $3,550 plus freight of $145 from the Braemer Cameras, Invoice 2093, dated August 18; terms are 1/10, n/60. 23 Received Credit Memorandum 597 for $115 from Raven Leathers. The amount is an allowance for slightly damaged but usable goods purchased on Invoice 668 of August 8. Prepare journal entries to record the above transactions assuming the company uses the periodic inventory system to keep track of its inventory.
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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