Using this Trial Balance: Cash 5,000 Accts. Rec. 5,000 Prepaid Ins. 1,800 Supplies 1,200 Equip. 26,000 Acc. Deprec.-Equip. 4,000 Accts. Pay. 6,000 Wages Payable Mohammad, Cap. 15,000 Svc. Revenue 25,000 Adv. Exp. 1,000 Deprec. Exp. Insurance Exp. Supplies Exp. Utilities Exp. 2,000 Wages Exp. 8,000 record, in proper journal entry form, adjusting entries for the three month period ending September 30, 2020 : Since the last payday in September, $2,000 of wages were earned by employees in September though they won’t be paid until the following month. An inventory of the Supplies taken at the close of business on September 30th revealed $700 worth of Supplies on hand. Of the amount of Prepaid Insurance on September 30th, one-third (1/3) was used during the period. The depreciation expense for the period has to be recorded on Equipment costing $26,000 with a useful life of five years that will have a salvage value of $6,000 at the end of its useful life.
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.
Using this
Cash 5,000
Accts. Rec. 5,000
Prepaid Ins. 1,800
Supplies 1,200
Equip. 26,000
Acc. Deprec.-Equip. 4,000
Accts. Pay. 6,000
Wages Payable
Mohammad, Cap. 15,000
Svc. Revenue 25,000
Adv. Exp. 1,000
Deprec. Exp.
Insurance Exp.
Supplies Exp.
Utilities Exp. 2,000
Wages Exp. 8,000
record, in proper
entries for the three month period ending September 30, 2020 :
Since the last payday in September, $2,000 of wages were earned
by employees in September though they won’t be paid until the
following month.
An inventory of the Supplies taken at the close of business on
September 30th revealed $700 worth of Supplies on hand.
Of the amount of Prepaid Insurance on September 30th, one-third
(1/3) was used during the period.
The
Equipment costing $26,000 with a useful life of five years that will have a
salvage value of $6,000 at the end of its useful life.
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