5. Vicky, a sole trader selling electrical equipment, started his business on 1 June 20X3. You are required to record the following business transactions in the appropriate accounts for June 20X3. June 1 Started business with RM60,000 in the bank, a shophouse of RM40,000 and a delivery van worth RM25,000 Purchased office furniture by cheque RM3,000 from Jati Furniture Bhd. Received an invoice from Hello Enterprise for RM10,000 for goods purchased. Issued a cheque for RM3,000 to settle part of the invoice 7 Issued invoices to Greengate Trading and Koko Enterprise for goods sold to them worth RM5,000 and RM300, respectively. Received full payment from Koko Enterprise in cash Sublet part of the shophouse to Rico Workshop for RM600 cash Issued a debit note to Hello Enterprise for RM100 and a credit note to Greengate Trading for RM250; both for goods damaged during transportation 20 Issued a cheque for RM800 to Simba Printshop for making the shop's signboard 24 Issued a business cheque for RM300 to Setia Restaurant as payment for dinner there with his family 26 Paid cash RM300 for petrol for the van used to deliver business goods 4 5 11 17
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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