was prepare for Amritha's business as at 31.12.2019 đid not tally. The difference was posted to a suspense account and the following erors were identified later. 1. The total of purchase account has been overstated by Rs.18000. 2. Payment of telephone charges of Rs., 18000 has been recorded as Rs.10000 in the telephoneaccount. 3. Withdrawal of goods by the owner for his personal use Rs.10000 has been debited twice in thedrawings account. 4. Payments of electricity Rs.1300 has been debited as Rs.3100 in electricity account. 5. Additional capital of Rs.80000 invested by the owner has been debited to the cash account andcredited to the sales account. Travelling expenses total of Rs.1550 in the petty cash book has not been entered in the travellingexpense account. 6.
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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