QUESTION 2 Mr. sajjad, a dentist, resigned from his position with large dental group In order to begin his own pediatric dental practice. The practice was organized as a sole proprietorship, called sajjad pediatric dentistry. The business transactions during June while the new venture was being organized are listed below. | June 1 sajjad opened a bank account in the name of the business by deposit $50,000 cash Which he had saved over a number of years | June 10 purchased a small office building located on a large lot for a total price of 182,400 of Which $106,000 was applicable to the land and $76,400 to the building and cash Payment of $36500 was made and note payable was issued for the balance of the Purchase price. June 15 purchased a microcomputer system from computer stores inc, for S4,680 cash. | June 19 purchased office furnishings including dental equipment form tumkey operation , inc., at a cost of $5760 .a cash down payment of $960 was made. The balance to be Paid in three equal installments due June 28, July 28, august 28 .the purchases was on Open account and did not require signing of a promissory note | June 26 a $140 monitor in the microcomputer system purchased on June 15 stopped working .the monitor was retuned to computer stores, inc., which promised to refund the $140 Within five days. June 28 paid turnkey operations, inc. $1600 cash as the first installment due on the account Payable for office furnishings. | June 30 received $140 cash from computer stores, inc., in full settlement of the account Receivable created on June 26. Requirements: Prepare journal entries to record the above transactions.
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.
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