On January 1, 2024, the general ledger of 3D Family Fireworks includes the following account balances: Accounts Debit Credit Cash S 26,700 Accounts Receivable 14, 200 Allowance for Uncollectible Accounts $ 1,900 Supplies 3,400 Notes Receivable (6%, due in 2 years) 27,200 Land 51,900 Accounts Payable 5, 200 Common Stock 69, 300 Retained Earnings 47,000 Totals S 123,400 S 123,400 During January 2024, the following transactions occur: 1. January 2 Provide services to customers for cash, $28, 200. 2. January 6 Provide services to customers on account, $68, 100. 3. January 15 Write off accounts receivable as uncollectible, $1,000. 4. January 20 Pay cash for salaries, $31,100. 5. January 22 Receive cash on accounts receivable, $69, 300. 6. January 25 Pay cash on accounts payable, S 3,800. 7. January 30 Pay cash for utilities during January, $9, 900. The following information is available on January 31, 2024. At the end of January, $3,600 of accounts receivable are past due, and the company estimates that 20% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 5% will not be collected. The note receivable of $27, 200 is considered fully collectible and therefore is not included in the estimate of uncollectible accounts. Supplies at the end of January total $750. Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31. Unpaid salaries at the end of January are $28, 100.
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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