Gifern Pineda, a CPA put up an accounting firm on December 1, 2019. The following transactions were completed during the month: Dec. 1 G. Pineda invested P200,000 as initial capital for his accounting firm Paid office rent for the month P16,400 Bought office supplies for cash P15,500 Bought computer from Mabuhay Equipment Corp. P80,000. paying 50% down and the balance payable in 90 days Office tables and chairs were purchased for cash, P12.500. 2 Received cash from a client for accounting services rendered P5,600. Paid Meralco, P4,000 3 4 Billed several clients for services rendered, P38,000 8 Borrowed money from Metrobank, P20,000 Received a 60-day note from a client for services rendered P12,000. Paid salaries of the employees, P16,500 G. Pineda withdrew P10,000 cash for his personal use Bought filing cabinets from Leeman Trading P15,000, terms 30 days. Issued a promissory note to Cortez Trading P32,000 for a copying machine Bought. Paid municipal license, P3,000 Paid the salaries of the employees P14,250 Paid Leeman Trading Corp. partially P4,000 Partial collection of the accounts of clients P12,800 10 15 15 18 20 31 31 31 31 -
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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