The trial balance and additional information givenbelow was obtained from the records of Vancouver Traders on 28 February 2020, the end of the financial year. REQUIRED Use the trial balance, adjustments and additional information to prepare the Income statement for the year ended 28 February 2020 uape aAnOA PRE-ADJUSTMENT TRIAL BALANCE ON 28 FEBRUARY 2020 Balance sheet acounts section Capital 000 00EE 000 96 Land and Buildings 000 Z16 000 Z9 Equipment at Cost 000 O Accumulated Depreciation on Vehicles 000 E Equipment ue vopepadag papepmuny Fixed deposit: Fin Bank (9% p.a.) 000 Trading inventory 000 EEI Debtors control Provision for Bad Debts Cash Float Creditors Control E ET 000 OvE (NZT) wurg ug veoy aletuow Nominal Accounts Section OZE OTS I sayes Cost of sales 000 ZE 0096 Smaes Salaries and wages sgap peg 00 ET Stationery Rates and Taxes sasuada oo 000 96 Telephone Aupyng os sanday 00 ZE Electricity and water 00s Bank charges 0009 Insurance veo adehuou uo saa Interest on Fixed Deposit Rent Income
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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