What is journal entry for this?
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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Date
Transaction
1 Jan 2021
Launched business with RO 25,000 in cash.
2nd Jan 2021
Acquired Tools & Equipment for RO 5,000.
31 Jan 2021
Opened an account with Bank Nizwa and deposited RO 10,000 in it.
Procured Billing Equipment of RO 1,000 and payment made by cheque.
Paid inauguration expenses worth RO 1,500.
1 Feb 2021
2nd Feb 2021
1 Mar 2021 Bought stock of furniture worth RO 10,000 on credit from Mr. Hamed.
2nd Mar 2021 Sold stock of furniture worth RO 7,000 on credit to Mr. Hillal.
31 Mar 2021 Mr. Hillal returned defective stock of furniture worth RO 2,000 to us.
1 Apr 2021 Returned defective stock of furniture worth RO 1,500 to Mr. Hamed
2nd Apr 2021 Mr. Abdullah used RO 1,000 worth of stock of furniture for his personal use.
1 May 2021 Withdrawn cash from Bank Nizwa worth RO 4,000 for office use.
2nd May 2021 Paid Salaries to workers worth RO 8,000."
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