The unadjusted and adjusted trial balances for American Leaf Company on October 31, 20Y2, follow: American Leaf Company Trial Balance October 31, 20Y2 Unadjusted Adjusted Debit Balances Credit Balances Debit Balances Credit Balances Cash 290 290 Accounts Receivable 690 766 Supplies 218 164 Prepaid Insurance 368 221 Land 476 476 Equipment 733 733 Accumulated Depreciation-Equipment 147 240 Accounts Payable 473 473 Wages Payable 0 20 Les Huff, Capital 1,668 1,668 Les Huff, Drawing 150 150 Fees Earned 1,363 1,439 Wages Expense 435 455 Rent Expense 145 145 Insurance Expense 0 147 Utilities Expense 73 73 Depreciation Expense 0 93 Supplies Expense 0 54 Miscellaneous Expense 73 73 3,651 3,651 3,840 3,840 Journalize the five entries that adjusted the accounts at October 31, 20Y2. None of the accounts were affected by more than one adjusting entry. 1. - Select - - Select - - Select - - Select - 2. - Select - - Select - - Select - - Select - 3. - Select - - Select - - Select - - Select - 4. - Select - - Select - - Select - - Select - 5. - Select - - Select - - Select - - Select -
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 unadjusted and adjusted trial balances for American Leaf Company on October 31, 20Y2, follow:
| American Leaf Company Trial Balance October 31, 20Y2 |
||||||||
| Unadjusted | Adjusted | |||||||
| Debit Balances | Credit Balances | Debit Balances | Credit Balances | |||||
| Cash | 290 | 290 | ||||||
| 690 | 766 | |||||||
| Supplies | 218 | 164 | ||||||
| Prepaid Insurance | 368 | 221 | ||||||
| Land | 476 | 476 | ||||||
| Equipment | 733 | 733 | ||||||
| 147 | 240 | |||||||
| Accounts Payable | 473 | 473 | ||||||
| Wages Payable | 0 | 20 | ||||||
| Les Huff, Capital | 1,668 | 1,668 | ||||||
| Les Huff, Drawing | 150 | 150 | ||||||
| Fees Earned | 1,363 | 1,439 | ||||||
| Wages Expense | 435 | 455 | ||||||
| Rent Expense | 145 | 145 | ||||||
| Insurance Expense | 0 | 147 | ||||||
| Utilities Expense | 73 | 73 | ||||||
| Depreciation Expense | 0 | 93 | ||||||
| Supplies Expense | 0 | 54 | ||||||
| Miscellaneous Expense | 73 | 73 | ||||||
| 3,651 | 3,651 | 3,840 | 3,840 |
Journalize the five entries that adjusted the accounts at October 31, 20Y2. None of the accounts were affected by more than one adjusting entry.
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Adjusting entries are those which are reported at the end of the period in order to adjust the prepayments and accruals in relation to revenues and expenses.
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