Mr. Ahmed Started a new repair shop business on 1st March 2019, the following events and transactions occurred during the first month of operations. 1. Ahmed invested OMR30,000 cash in the business. 4. Purchased land costing OMR10,000 for cash. 8. Incurred advertising expense of OMR2,000 on account. 11. Paid salaries to employees OMR1,500. 12. Purchased office supplies costing OMR 4000 for cash 13. Paid OMR1,000 cash for electricity bill. 17. Withdrew OMR1,500 cash for personal use. 20. Provided services to customers on account OMR4000 25. Received OMR8,000 cash for services provided to customers 27. Paid OMR1,000 on balance owed for advertising incurred on March 8th. 30. Received OMR 2000 from customers for services provided on March 20th on account. Instructions: Prepare a tabular form of Accounting Equation and enter the above transactions in the accounting equation.
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.
Mr. Ahmed Started a new repair shop business on 1st March 2019, the following events and transactions occurred during the first month of operations.
1. Ahmed invested OMR30,000 cash in the business.
4. Purchased land costing OMR10,000 for cash.
8. Incurred advertising expense of OMR2,000 on account.
11. Paid salaries to employees OMR1,500.
12. Purchased office supplies costing OMR 4000 for cash
13. Paid OMR1,000 cash for electricity bill.
17. Withdrew OMR1,500 cash for personal use.
20. Provided services to customers on account OMR4000
25. Received OMR8,000 cash for services provided to customers
27. Paid OMR1,000 on balance owed for advertising incurred on March 8th.
30. Received OMR 2000 from customers for services provided on March 20th on account.
Instructions: Prepare a tabular form of
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