After several months of planning, Mary Tratini started a called "Italian Product". The following business activities occurred during it's first month (June 1-30, 2020): Please note, there are NO sales tax on the transactions 1) The owner deposited $50,000 cash in the business bank account 2) Purchase machinery, 9,200$ cash. Should be used for 4 years and could be sold 3,000$ at the end of those years. Declining balance method 3) Supplies purchases $2,300 on credit 4) Services rendered to customers $4,150. Received cash payment 5) Purchased $18,000 of equipment on credit. We believe it's going to be used for 13 years and will go to scrap (garbage) at the end of those years. Straight-line method 6) Create Petty cash 800$ 7) Services rendered to customers $8,100. Received cash payment 8) Rent payment $500 cash 9) Payment to suppliers $350 (for previous purchased) 10) 50$ was used for taxi, 15$ parking ticket 11) Provided Services to customers $1,400 on credit. 12) Received 13,000$ for a contract to be completed in the next few months. 13) Record any missing journal entries Here are the July 2020 (July.01-31) transactions : 1) 758 was used for employee's gifts, 25$ was used for withe paper (printer) 2) 15% of the contract has been completed 3) Payment to suppliers $1,800 (for previous purchased) 4) Rent payment $500 cash
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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