5. The following trial balance was extracted from the books of Fasuha Trading as at 31 December 2020. Particulars Debit Credit RM RM Office equipment Motor vehicles Furniture Accumulated depreciation as at 1 January 2020: Office equipment Motor vehicles Furniture Account receivables and account payables Capital 6% loan to Rara Purchases and sales Discount Advertising Cash in hand Provision for doubtful debts Commission received 6% loan from Afina Bank (taken from 1 May 2020) Rent Drawings Maintenance and petrol Staffs wages 12,250 9,150 3,600 2,450 1,373 1,060 3,632 6,860 29,608 2,500 19,110 31,560 215 4,250 1,630 175 300 740 8,000 1,200 1,900 1,260 700 4,005 1,000 5,270 210 250 610 915 110 3,415 79.710 79.710 Insurance Cash at bank Carriage inwards Carriage outwards Telephone and electricity Duties on purchases Returns Inventory as at 1 January 2020 112 TOTAL The following adjustment are to be taken into account: a. Inventory as at 31 December 2020 was valued at RM2,600 b. The interest on the loan taken from Afina bank was not recorded in the accounts. c. Prepaid RM300 of the insurance premiums d. Prepaid RM125 of the telephone and electricity bills. e. Depreciation was provided using the rates as follows: Office equipment IH. Motor vehicles 20% p.a on carrying value 15% p.a on cost 10% p.a on cost ii. Furniture f. Bad debts of RM110 to be written off g. The provision for doubtful debts was to be adjusted to 2.5% of the remaining account receivables h. Fasuha had drawn RM150 cash from the business to spend on his son's birthday.
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.
1.
ps: here i include the statement of
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
