Prepare adjusting journal entries for Wendy Catering in the GENERAL JOURNAL for the year ended 31 December 2022, for each of these situations. Narratives for each entry are required. a. Wendy Catering received RM5,000 from a customer on November 15, 2022, for catering service to be performed in December 2022. The RM5, 000 was recorded in Unearned Revenue in November 2022. By the end of December, the service has been performed. b. Wendy Catering invested RM50, 000 into a 5% government bond some years ago. The 5% interest was due to be paid on 31 December every year. However, Wendy Catering had yet to receive the payment from the government by 31 December 2022. c. Wendy Catering paid a total salary of RM28,000 every month to all of its staffs. Due to some unforeseen circumstances, the salaries for the final week amounting to RM7,000 have not been paid. d. Wendy Catering paid RM12,000 for insurance for 12 months beginning on 1 September 2022. The amount was recorded as Prepaid Insurance on 1 September. e. Wendy Catering purchased a RM3,500 kitchen equipment on 1 January 2022. It is
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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