March 1 2 3 3 Started business with $100,000 in the bank. The owner introduced his own Motor Car Valued at $80,000 to the business Received a cheque representing a loan from Bay Bank for $125,000. Bought equipment by cheque $25,000. Paid a cheque for $60,000 to cover the costs of goods bought for resale. 5 Goods sold for cash $50,000. 5 We purchased an office desk on credit from S&L Office Supplies $82,500. 6 Sold goods on credit to Jupiter Enterprises $62,500. 7 Bought goods on credit from Maxwell Designers $46,000. 8 Sold goods on credit to Bailey's Dress Shop $48,500 10 Paid cash of $10,000 for stationery 12 Returned defective goods to Maxwell Designers which costs $3,000. 14 Bought goods on credit from Star Creations $16,250. 14 Sold goods to Dreams Department Store receiving a cheque for $62,500. 16 Jupiter Enterprises settled their account with cash receiving a discount of 5%. 17 Deposited cash of $36,000 in the business bank account. 18 Maxine's Dress shop returned merchandise bought on June 9; valuing $2,700. Paid Maxwell Designers $40,000 in full settlement of the balance outstanding by Cheque; having received a discount of $3,000. 20 The owner paid S&L Office Supplies $42,500 from personal funds. 22 The owner of Belles Retail Store took merchandise for his personal use valuing $12,000. 25 Paid wages by cash $52,000. 27 Paid rent $22,000 by cheque. 27 Paid water rates $15,000 by cash. 27 Paid electricity $30,000 by cheque.
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.
Balance off the accounts in the ledger and extract a
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