Use the following to answer questions 28 – 35 - MYM Corporation has provided their trial balance at the end of January. Debits Credits Cash $70,000 Accounts receivable 59,000 Supplies Prepaid expenses 900 5,000 Buildings/Equipment, net 1,000,000| Accounts payable $25,000 Income tax payable 35,000 1,500 Utilities payable Deferred revenue 10,000| Notes payable 125,000 Common stock 500,000 Retained Earnings 425,000 Dividends 100,000 Service revenue 775,400 Salaries expense 325,000 Insurance expense 18,000 Advertising expense Supplies expense Depreciation expense 222,000 5,000 45,000 Rent expense Utilities expense 30,000| 17,000 Totals $1,896,900 S1,896,900| Based on the data provided in the trial balance find the following:
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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