Note: Please put your answers only in the section below the Bold Red sentence at the end of the Required section below. Christmas Town sells all things for Christmas: ornaments, stockings, lights, and more. The owners of Christmas Town would like to know what assets, liabilities, and stockholders' equity they have on December 31, 20X1. The account balances on December 31, 20X1, in a jumbled order, are as follows: Accounts payable Retained earnings Salaries expense Inventory Furniture and equipment Salaries payable Accounts receivable Building Revenue Cash Notes payable Capital stock 78,600 215,000 111,000 57,900 24,000 1,400 35,600 461,100 326,000 10,400 50,000 29,000 Note: The balance in the retained earnings account is the actual balance in the account prior to preparation of the financial statements, which is of course the ending balance from the previous year. Also, please note that the account balances listed above contain all of the accounts, not just the balance sheet accounts, of the company.
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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