Use the Following information for the Question Numbers 5 to 10. Ms. Maryam opened training services company in January 2020. She plans to prepare the monthly financial statement dated 31 January 2020. During this month period he completed the following transaction. January 1. Ms. Maryam invested cash OMR 50,000, Equipment value OMR 5,000 January 2. Ms. Maryam went to Malaysia and paid the cost from her own money. January 3. Paid for advertisement published in the newspaper OMR 300. January 4. Completed work for a client and immediately collected cash OMR 5,000. January 8. Hired an accountant and promised to give him OMR 750. January 10. Purchased Computer OMR 1000 on credit. January 12. Purchased supplies OMR 8,000 cash. January 14. Ms. Maryam withdraw OMR 2,000 from the business bank account for personal use. January 15. Performed a service for a customer who promised to pay later in this month OMR 500. January 17. Received cash OMR 6,000 from a client for the service to be provided for the month of February and March 2020. January 18. Collected OMR 500 on the amount owed by the client. January 22. Purchased furniture and returned it back on the same day as it was defective OMR 600 January 25. Paid cash OMR 500 for liability on computer purchased previously. January 28. Paid salary of the accountant OMR 750 January 30. Completed work for another client OMR 10,000 but paid only for 50% of the amount. The remaining agree to pay later. January 31. Paid OMR 600 cash for the rent of office space for the next three months. January 31. Received utilities bill OMR 200.
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.
9.1 From the transaction(in image) you are required to :
After completing the Unadjusted
a.Unearned revenue OMR 1000 at the end of the month.
b. Rent expense for the month OMR 200
c. The Equipment has useful life 3 years and residual value OMR 500
Trial balance: Trial balance is a summary of all the ledger accounts balances presented in a tabular form with two column, debit and credit. It checks the mathematical accuracy of the ledger postings and helps preparing the final accounts.
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