Identify the word or term being described in the sentences by matching the words or terms labeled A to J. Write your answer on separate sheet of paper. A. Accruals Accrued Acquisition Cost Allowance Method Depreciation expense expenses Depreciable Cost F. Deferrals H. Direct L. Bad debts Monthly Depreciation Method expense 1. This classification of adjusting entry has accrued revenues and accrued expenses. 2. It is the difference between the acquisition cost and the salvage value. 3. These are expenses that have been incurred but not yet paid. 4. This method of recording uncollectible accounts records bad debts expense only when a specific accounts receivable is ascertained to be worthless. 5. It refers to the purchase price of the asset. 6. There are unearned revenues and prepaid expenses in this classification of adjusting entry. 7. This method of recording uncollectible accounts records bad debts expense even the uncollectible is only estimated. 8. It refers to the estimated expense from a portion of accounts receivable. 9. This amount is computed by dividing the annual depreciation by 12 months. 10. It refers to the estimated expense allocated to the tangible asset (except land).
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.
Step by step
Solved in 2 steps with 1 images
