Dec. 2 Purchased 1,000 units of inventory for $4,000 on account from Sparkle Company on terms, 5/10, n/20. 5 Purchased 1,200 units of inventory from Borax on account with terms 4/10, n/30. The total invoice was for $6,000, which included a $300 freight charge. 7 Returned 300 units of inventory to Sparkle from the December 2 purchase (cost $1,200). 9 Paid Borax. 11 Sold 500 units of goods to Happy Maids for $5,500 on account with terms 30. Crystal Clear's cost of the goods was $2,000. 12 Paid Sparkle. 15 Received 100 units with a retail price of $1,100 back from customer Happy Maids. The goods cost Crystal Clear $400. 21 Received payment from Happy Maids, settling the amount due in full. 28 Sold 500 units of goods to Bridget, Inc. on account for $6,500 (cost $2,022). Terms 1/15, v30. 29 Paid cash for utilities of $550. 30 Paid cash for Sales Commission Expense of $214. 31 Received payment from Bridget, Inc., less discount.
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.
Using all journals
This problem continues the Crystal Clear Cleaning practice set begun in Chapter 2 and continued through Chapters 3 and 4.
Crystal Clear Cleaning has decided that, in addition to providing cleaning services, it will sell cleaning products. Crystal Clear uses the perpetual inventory system. During December 2018, Crystal Clear completed the following transactions:
Requirements
- Use the appropriate journal to record the preceding transactions in a sales journal (omit the Invoice No. column), a cash receipts journal (omit Sales Discounts Forfeited column), a purchases journal, a cash payments journal (omit the Check No. column), and a general journal.
- Total each column of the special journals. Show that total debits equal total credits in each special journal.
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