Rowland Company is a small editorial services company owned and operated by Fran Briggs. On August 31, 2018, the end of the current year, Rowland Company's accounting clerk prepared the following unadjusted trial balance: Rowland Company Unadjusted Trial Balance August 31, 2018 Debit Credit Balances Balances Cash 3,580 32,500 Accounts Receivable Prepaid Insurance 6,060 Supplies 1,650 Land 95,570 Building 172,410 Accumulated Depreciation-Building 116,770 Equipment 114,850 Accumulated Depreciation-Equipment 83,170 Accounts Payable 10,190 Unearned Rent 5,780 80,000 Common Stock Retained Earnings 107,300 Dividends 12,670 Fees Earned 275,410 Salaries and Wages Expense 164,140 Utilities Expense 36,080 Advertising Expense 19,280 Repairs Expense 14,600 Miscellaneous Expense 5,230 678,620 678,620 The data needed to determine year-end adjustments are as follows: Unexpired insurance at August 31, $4,060. Supplies on hand at August 31, $500. Depreciation of building for the year, $2,690. Depreciation of equipment for the year, $2,330. Rent unearned at August 31, $1,500. Accrued salaries and wages at August 31, $2,630. Fees earned but unbilled on August 31, $15,420.
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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