Following are the transactions of Sustain Company. June 1 T. James, owner, invested $16,000 cash in Sustain Company. June 2 The company purchased $9,000 of furniture made from reclaimed wood on credit. June 3 The company paid $1,600 cash for a 12- month prepaid insurance policy on the reclaimed furniture. June 4 The company billed a customer $8,000 for sustainability services provided. June 12 The company paid $9,000 cash toward the payable from the June 2 furniture purchase. June 20 The company collected $8,000 cash for services billed on June 4. June 21 T. James invested an additional $15,000 cash in Sustain Company. June 30 The company received $10,000 cash in advance of providing sustainability services to a customer.
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.
The practice of capturing commercial transactions for the first time in the account books is known as journal entry. Entries, closing entries, and regular entries are examples of diary entries. Journal entries serve as the foundation for other accounting tasks such as ledger account preparation, trial balances, financial statements, and so on. They are listed in chronological order based on the date of the incident. Adjusting entries, closing entries, and regular entries are examples of diary entries.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
