The trial balance of Chelsea Elliott, marketing services provider, at 30 June 2018 was as follows: Chelsea Elliott, Marketing Services Unadjusted trial balance as at 30 June 2018 Account Debit Credit Cash at bank $7,000 Accounts receivable 19,530 GST receivable 2,340 Prepaid rent 1,890 Prepaid insurance 2,460 Office supplies 3,620 Office equipment 10,980 Accumulated depreciation ― office equipment $2,220 Accounts payable 2,520 Unearned fees 990 Loan payable ― due 2018 8,280 GST payable 7,250 C Elliott, capital 14,940 C Elliott, drawings 46,800 Fees revenue 124,570 Salaries expense 51,480 Telephone expense 5,490 Rent expense 9,180 $160,770 $160,770 1. Interest expense of $470 has accrued on the loan payable. 2. A physical count of office supplies on 30 June shows $500 of unused supplies on hand. 3. Depreciation of the office equipment this year is estimated to be $920. 4. Half the amount in the unearned fees account had been earned by the end of the year. 5. The amount in the prepaid rent account covers this June and the next 2 months. 6. Of prepaid insurance, 70% expired this period. 7. Salaries expense accrued for the last 4 days in June amounts to $1,490. 8. The telephone expense for June of $600 has not been recorded or paid. No tax invoice has been issued.
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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