JOHN MENNING, CPA Trial Balance March 31, 2018 Balance Account Title Debit Credit Cash $ 17,000 Accounts Receivable 10,500 Office Supplies 1,200 Land 29,000 Furniture Automobile Accounts Payable $ 3,800 Unearned Revenue Common Stock 46,200 Dividends Service Revenue 11,200 Salaries Expense 2,500 Rent Expense 1,000 Total $ 61,200 $ 61,200 Apr. 4 Collected $6,000 cash from a client on account. 8 Performed tax services for a client on account, $5,500. 13 Paid $3,300 on account. 14 Purchased furniture on account, $4,000. 15 Menning contributed his personal automobile to the business in exchange for common stock. The automobile had a market value of $11,500. 18 Purchased office supplies on account, $1,600. 19 Received $2,750 for tax services performed on April 8. 20 Paid cash dividends of $7,500. 21 Received $4,900 cash for consulting work completed. 24 Received $2,500 cash for accounting services to be completed next month. 27 Paid office rent, $900. 28 Paid employee salary, $1,200.
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.
Journalizing transactions, posting
The trial balance of John Menning, CPA, is dated March 31, 2018:
During April, the business completed the following transactions:
Requirements
- Record the April transactions in the journal using the following accounts: Cash;
Accounts Receivable ; Office Supplies; Land; Furniture; Automobile; Accounts Payable; Unearned Revenue; Common Stock; Dividends; Service Revenue; Salaries Expense; and Rent Expense. Include an explanation for each entry. - Open the four-column ledger accounts listed in the trial balance, together with their balances as of March 31. Use the following account numbers: Cash, 11; Accounts Receivable, 12; Office Supplies, 13; Land, 14; Furniture, 15; Automobile, 16; Accounts Payable, 21; Unearned Revenue, 22; Common Stock, 31; Dividends, 33; Service Revenue, 41; Salaries Expense, 51; and Rent Expense, 52.
- Post the journal entries to four-column accounts in the ledger, using dates, account numbers, journal references, and posting references. Assume the journal entries were recorded on page 5 of the journal.
- Prepare the trial balance of John Menning, CPA, at April 30, 2018.
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