The transactions that follow took place at the FDN Day Care Center during August 2023. The business is a play and learning center for toddlers. The Chart of Accounts and financial transactions for the first month of operations are presented below and on the next page:
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 transactions that follow took place at the FDN Day Care Center during August 2023. The business is a play
and learning center for toddlers.
The Chart of Accounts and financial transactions for the first month of operations are presented below and on
the next page:
FDN Day Care Center
Chart of Accounts
Account #
101
111
121
122
131
132
201
301
302
401
501
502
503
504
Assets
Cash
Account Title
Accounts Receivable
Books & Toys
Office Supplies
Equipment
Furniture
Liabilities
Accounts Payable
Owner's Equity
Faith D. Nakpil, Capital
Faith D. Nakpil, Drawing
Revenues
Day Care Fees
Expenses
Rent Expense
Repair Expense
Salaries Expense
Utilities Expense](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F86a974d0-ff0c-4760-91d3-2d477b3e091b%2Fe92ab561-2bd4-4264-8af9-6fb9dd31341c%2F3a6tski_processed.jpeg&w=3840&q=75)
![Date Transactions
Aug 1
2023 Faith D. Nakpil, owner of FDN Day Care Center, invested in her business the following:
Cash, P300,000 and an old computer originally costing P70,000 but with a fair market value of
P40,000 at the time of investment.
2
Purchased tables, chairs, and shelves from Aim High Furniture for P200,000, on terms: 20% down
payment, issuing Check #0001, and the balance payable in 20 days. Received Invoice #1237 from
Aim High Furniture.
3
4
6
Received P50,000 in cash from Mrs. Uy as day care fees for the month. Issued Invoice #001 and
Official Receipt #001.
8 Returned broken toys worth P2,000 to Al Merchandising. Received Credit Memo #11 from
Purchased nursery books and toys from Al Merchandising for P25,000, payable in 15 days.
Received Invoice #562 from Al Merchandising.
Purchased various office supplies from Animo Trading for P5,000, issuing Check #0002.
Received Invoice #28 from Animo Trading.
Al Merchandising.
10
Paid P50,000 to Aim High Furniture, issuing Check #0003.
11 Paid for repair and repar
13
of the shelves, P8,000, issued Check #0004.
Issued Invoice #002 to Mr. Cruz for P50,000 as day care fees, payable by client on terms: 30% down
payment, balance payable in 10 days. Issued Official Receipt #002 for the down payment received
from Mr. Cruz.
15 Paid employees' salaries, P18,000, issued Check #0005.
16 Issued Invoice #003 to Mrs. Lim, P100,000, payable by client in 30 days.
18 Paid the account due to A1 Merchandising, issued Check #0006.
19 Faith D. Nakpil withdrew P10,000 for personal use, issued Check #0007.
20 Faith D. Nakpil paid the balance of the account with Aim High Furniture using her personal funds.
23 Collected P35,000 from Mr. Cruz; issued Official Receipt #003.
25 Faith D. Nakpil withdrew P1,000 worth of office supplies for personal use.
27 Purchased new laptops from Alpha Computers for P120,000, on terms: 40% down payment, issuing
Check #0008, and the balance payable in 45 days. Received Invoice # 753 from Alpha Computers.
Paid the rent for the month, P30,000, issued Check #0009.
29
30 Paid employees' salaries, P18,000, issued Check # 0010.
31 Paid the light, water, and internet bills for the month, P27,000, issued Check #0011.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F86a974d0-ff0c-4760-91d3-2d477b3e091b%2Fe92ab561-2bd4-4264-8af9-6fb9dd31341c%2Frccvbdk_processed.jpeg&w=3840&q=75)
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