| Journalizing transactions, posting to accounts in four-column format, and preparing a trial balance | The trial balance of Sam Mitchell, CPA, is dated January 31, 2012: SAM MITCHELL, CPA Trial Balance January 31, 2012 Account No. Cash Account Debit $ 7,000 Credit 11 12 Accounts receivable 10,500 Supplies Land Accounts payable Minchell, capital Minchell, drawing 13 600 14 17,000 21 $ 4,700 31 30,400 32 41 Service revenue 51 Salary expense 52 Rent expense Total S 35,100 S 35,100 During February, Mitchell or his business completed the following transactions: Feb 4 Collected 54,000 cash from a client on account. 8 Performed tax services for a client on account, $4,600. 13 Paid business debe on account, $2,400. 18 Purchased office supplies on account, $900. 20 Mitchell withdrew cash of $2,200. 21 Mitchell paid for a deck for his private residence using personal funds, $8,000. 22 Received $2,300 cash for consulting work just completed. 27 Paid office rent, $500. 29 Paid employee salary, $1,600. Requirements 1. Record the February transactions in the journal. Include an explanation for cach entry. 2. Post the transactions to four-column accounts in the ledger, using dates, account numbers, journal references, and posting references. Open the ledger accounts listed in the trial balance, together with their balances at January 31. 3. Prepare the trial balance of Sam Mitchell, CPA, at February 29, 2012.
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.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
