INSTRUCTION: Indicate the amount on the appropriate side of the affected elements of the above transactions. Plus sign (+) for increase and minus sign (-) for decrease. Use the following format.
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.
ANALYZING TRANSACTIONS - EXPANDED BASIC
Ghee Lando, a certified public accountant, opens an accounting firm. Transactions during the period follow:
- Gee Lando, the owner, invested cash to the business, P200,000.
- Gee LAndo, the owner, invested office equipment to the business P60,000.
- Borrowed money from the bank for the
working capital of the business, P50,000. - Paid personal expenses of the owner because she is currently out of town. The owner will pay her account when she returns in town, P5,000.
- Bought office furniture on credit P14,000.
- Bought computer and printer costing P40,000, paying 30% of the total amount and the balance on account.
- Billed a client for services rendered, P30,000.
- Rendered services to a client, P20,000. The client paid 40% cash and the balance on account.
- The client in number 7 rendered repair services to the company’s computer equipment. The amount is offset against his receivable, P30,000.
- Billed another client for services rendered, P6,000.00
- The client in number 8 settled his balance, P12,000.
- Paid electricity bill amounting to P3,000.
INSTRUCTION: Indicate the amount on the appropriate side of the affected elements of the above transactions. Plus sign (+) for increase and minus sign (-) for decrease. Use the following format.
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