ing transactions in special journals.
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.
Presented below are the transactions for Mariano Lerin Bookstore for March 2019.
Mar. 2 Purchased merchandise on credit from Digao Publishers, terms 2/10, n/30, P74,000.
3 Sold merchandise on credit to Detoya Book Shop, terms 1/10, n//30, P10,000.
5 Sold merchandise for cash, P7,000.
6 Purchased and received merchandise on credit from Made Easy Bookstore, terms 2/10, n/30, P42,000.
7 Received freight bill from Super Express from shipment received on March 6, P570.
9 Sold merchandise on credit to Recoletos Books, terms 1/10, n/30, P38,000.
10 Purchased merchandise from Digao Publishers, terms 2/10, n/30, P26,500.
11 Received freight bill from Super Express for sale on Mar. 9, P291.
12 Paid Digao Publishers for purchase of Mar. 2.
13 Received payment in full for Detoya Books’ purchase on Mar. 3.
14 Paid Made Easy Bookstore half the amount owed on the Mar. 6 purchase. A discount is allowed for partial payment
15 Returned faulty merchandise worth P3,000 do Digao Publishers for credit against purchase of Mar. 10.
16 Purchased office supplies from Olamit Supplies for P4,780, terms n/30.
17 Received payment from Recoletos Books for half of the purchase of Mar. 9. A discount is allowed for partial payment.
18 Paid Digao Publishers in full amount owed on purchase of Mar. 10, less return on Mar. 15.
19 Sold merchandise to Sir Ed Trading on credit, terms 2/10. n/30, P7,800.
20 Returned for credit several items of office supplies purchased on Mar. 16, P1,280.
22 Issued a credit memo to Sir Ed Trading for returned merchandise, P1,800.
25 Paid for purchase of Mar. 16, less returns on Mar. 20.
26 Paid freight entity for freight charges for Mar. 7 and 11.
27 Received payment of amount owed by Sir Ed Trading for purchase of Mar. 19, less credits of Mar. 22.
28 Paid Made Easy Bookstore for the balance on Mar. 6 purchase.
31 Sold merchandise for cash, P9,730.
Record the following transactions in special journals.
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