Nadia Davids is a Bsc. Medicine student at university and started her own cleaning service in order to pay for her fees. Her business started on 1 April 2016 and has been running for the past month. She has rendered various services over the past month and requests your assistance in analysing the when she has earned income and when she incurred expenses. The following transactions took place during the month of April: 1. Nadia contributed R5 000 which she received from her parents towards the start of her cleaning business. 2. She bought cleaning supplies to the value of R3 000 from Clean Co and paid cash, as well as cleaning equipment of R2 000 on credit from Steam Clean. 3. Nadia received R2 000 for cleaning 3 apartments, for which she charged R750 each. 4. Nadia hired and employee at the beginning of April and paid pays her R800 per week. 5. The business paid an amount of R8 000 insurance until 31 December 2016. 6. Nadia need some cleaning supplies and took some for her personal use to the value of R100. 7. The business received the telephone bill of R640 as well as the electricity bill of R800. The business only paid the telephone bill. 8. The business rendered services to 6 clients on credit at R750 per apartment. 9. The business paid R500 for storage space for the cleaning equipment. 10. Nadia realised that she has cleaning supplies of R600 on hand at the end of the month and needs to calculate how much was used. ou are required to: Identify the amount of income earned or expense incurred for each of the transactions above at the end of April 2016 and explain why
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.
QUESTION 1
Nadia Davids is a Bsc. Medicine student at university and started her own cleaning service in order to pay for her fees. Her business started on 1 April 2016 and has been running for the past month. She has rendered various services over the past month and requests your assistance in analysing the when she has earned income and when she incurred expenses.
The following transactions took place during the month of April:
1. Nadia contributed R5 000 which she received from her parents towards the start of her cleaning business.
2. She bought cleaning supplies to the value of R3 000 from Clean Co and paid cash, as well as cleaning equipment of R2 000 on credit from Steam Clean.
3. Nadia received R2 000 for cleaning 3 apartments, for which she charged R750 each.
4. Nadia hired and employee at the beginning of April and paid pays her R800 per week.
5. The business paid an amount of R8 000 insurance until 31 December 2016.
6. Nadia need some cleaning supplies and took some for her personal use to the value of R100.
7. The business received the telephone bill of R640 as well as the electricity bill of R800. The business only paid the telephone bill.
8. The business rendered services to 6 clients on credit at R750 per apartment.
9. The business paid R500 for storage space for the cleaning equipment.
10. Nadia realised that she has cleaning supplies of R600 on hand at the end of the month and needs to calculate how much was used.
ou are required to: Identify the amount of income earned or expense incurred for each of the transactions above at the end of April 2016 and explain why
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