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ACC101A: Introduction to Business Accounting

   

Added on  2020-05-16

15 Pages2888 Words50 Views
Running head: BUSINESS ACCOUNTINGBusiness accountingName of the studentName of the universityAuthor note
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1BUSINESS ACCOUNTINGExecutive summary The main objective of this report is to focus on the importance of trial balance and journalentries for preparation of the balance sheet and income statement. It will present the journalentries for the adjusted transactions. Further, the report will also present the preparation ofbalance sheet, income statement and changes in equity through the adjusted trial balance.Moreover, the report will focus on the purpose of preparing the trial balance and adjustingjournal entries.
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2BUSINESS ACCOUNTINGTable of ContentsIntroduction................................................................................................................................3Step 2 – Journal entries for the adjustment transactions............................................................3Step 3 – Completion of worksheet.............................................................................................4Step 4 – Income statement from completed worksheet.............................................................5Step 5 – Closing entries journals................................................................................................6Step 6 – Changes in equity.........................................................................................................6Step 7..........................................................................................................................................81)Trial balance and its purpose.......................................................................................82)Adjustment journal entries and purpose of recording adjustment journal entries.......93)Purpose of preparing the adjusted trial balance.........................................................104)Difference between adjusting journal entries and closing journal entries.................11Conclusion................................................................................................................................12Reference..................................................................................................................................13
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3BUSINESS ACCOUNTINGIntroduction Trial balance is the accounting report or bookkeeping that records the balances ineach general ledger of the company. The credit balances are recorded in a column with thename as credit balance and the debit balances are recorded in another column that is named ascredit balance. If total debit side of the trial balance does not match with the credit side theremust have been some errors included (Edwards 2013). On the other hand, the adjustingentries are used for correcting the errors and shall be completed prior to the issuance of thefinancial statement of the company.Step 2 – Journal entries for the adjustment transactionsJournal Entries in the books of Paul servicesFor the period ended on 30th June, 2016DateParticularsAccNo.Amount(Dr.)Amount(Cr.)30-Jun-16Interest Expense20129,600Interest Payable20129,600(To record accrued interest on mortgage)30-Jun-16Supplies Expense2012,220Supplies1152,220(To record supplies used during the period)30-Jun-16Insurance Expense2014,736Prepaid Insurance1204,736(To record prepaid amortisation)30-Jun-16Depreciation Expense - Furniture ((74000-4000)/5)20114,000Acc. Depreciation. - Furniture13714,000(To record depreciation expense for the period)30-Jun-16Depreciation Expense - Office Equipment ((148000-8600)/5)20128,000
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