Nov. 1 Stockholders contributed $15,000 and a truck, with a market value of $3,000, to the business in exchange for common stock. 2 The business paid $4,000 to Pleasant Properties for November through February rent. (Debit Prepaid Rent) 3 Paid $4,800 for a business insurance policy for the term November 1, 2018 through October 31, 2019. (Debit Prepaid Insurance) Purchased cleaning supplies on account, $320. 5 Purchased on account an industrial vacuum cleaner costing $1,500. The invoice is payable November 25. 7 Paid $3,900 for a computer and printer. 4. 6. Performed cleaning services on account in the amount of $4,700. 10 Received $200 for services rendered on November 9. 15 Paid employees, $400. Received $15,000 for a 1-year contract beginning November 16 for cleaning services to be provided. Contract begins November 16, 2018, and ends November 15, 2019. (Credit Unearned Revenue) 16 17 Provided cleaning services and received $400 cash. 18 Received a utility bill for $175 with a due date of December 4, 2018. (Use Accounts Payable) 20 Borrowed $36,000 from bank with interest rate of 6% per year. 21 Received $500 on account for services performed on November 9. 25 Paid $750 on account for vacuum cleaner purchased on November 5. 29 Paid $200 for advertising. 30 Cash dividends of $1,400 were paid to stockholders.
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 to T-accounts, and preparing a
Consider the following transactional data for the first month of operations for Crystal Clear Cleaning.
Requirements
- Journalize the transactions, using the following accounts: Cash;
Accounts Receivable ; Cleaning Supplies; Prepaid Rent; Prepaid insurance; Equipment; Truck; Accounts Payable; Unearned Revenue; Notes Payable; Common Stock; Dividends; Service Revenue; Salaries Expense; Advertising Expense; and Utilities Expense. Explanations are not required. - Open a T-account for each account.
Post the journal entries to the T-accounts, and calculate account balances.- Prepare a trial balance as of November 30, 2018.
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