Pharoah Company ended its fiscal year on July 31, 2022. The company's adjusted trial balance as of the end of its fiscal year is as follows. 726 No. 101 Cash 112 Accounts Receivable 157 Equipment 158 Accumulated Depreciation-Equipment 201 Accounts Payable 301 Owner's Capital 305 Owner's Drawings 400 Service Revenue 711 732 Part 2 July 31 July 31 Date Explanation July 31 Account Titles July 31 Depreciation Expense Salaries and Wages Expense Utilities Expense July 31 Your answer is partially correct Balance Close entry Date Explanation July 31 Pharoah Company Adjusted Trial Balance July 31, 2022 Close entry Post to Owner's Capital and Income Summary accounts. (Post entries in the order of journal entries presented in the previous pert, Eater negative amounts using either a negative sign preceding the number e.g.-45 or parentheses eg. (45).) Close entry: Close entry Close entry Debit $10,000 8,900 15.700 Owner's Capital Debit Debit 16,100 7,200 56,500 15.200 $130.200 Income Summary Credit $7,400 4,400 53,800 64,000 $130,200 Credit Credit Balar Balar
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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