Are debits or credits typically listed first in general journal entries? Are the debits or the credits indented?

Q: Prepare the entry to record the purchase of Cullumber Company on Linden's books. (Credit account…

A: The acquisition is one of the transactions where one company purchases or acquires another company…

Q: Prepare journal entries on the books of Tamarisk Company to record these transactions. (Credit…

A: Journal is a record of financial transactions in chronological order.It provides a detailed account…

Q: How are credit balances in accounts receivable reported on the financial statements?

A: Sales is the revenue being earned by the business on delivery of goods and services by the business.…

Q: What types of accounts are referred to as temporary accounts?

A: Accounting follows the double-entry bookkeeping system. The basic rules of double-entry bookkeeping…

Q: What are the journal entries for recording a promissory note?

A: The terms and circumstances of a loan or obligation are described in a promissory note, which is a…

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.