The unadjusted trial balance of the Remedios Palaganas Gourmet Food for December 31, 2015, follows: Cash P 504,000 789,000 144,000 Accounts Receivable Prepaid Rent Cooking Supplies 357,000 530,000 Land 1,250,000 Building Accumulated Depreciation- Building Cooking Equipment Accumulated Depreciation - Cooking Equipment Notes Payable Accounts Payable Palaganas, Capital Palaganas, Withdrawal Gourmet Cooking Revenues Salaries Expense Travel Expense Advertising Expense Insurance Expense Utilities Expense Miscellaneous Expense P 413,000 870,000 212,000 1,400,000 117,000 1,435,000 240,000 2,256,000 619,000 127,000 215,000 40,000 102,000 46,000 5,833,000 Totals P 5,833,000 Additional Information: a) One-half of the prepaid rent has expired. b) Cooking supplies on hand at year-end amounted to P25,000. c) Depreciation on the building and on the cooking equipment amounted to P28,000 and P52,000 respectively. d) Accrued salaries at year-end amounted to P27,000. e) Interest amounting to P252,000 has accrued on notes payable.
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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