15. Accrual accounting adheres to which of the following principles? a. Matching principle b. Historical cost principle c. Matching principle and historical cost principle d. Neither matching principle nor historical cost principle uestions 16 through 19 are based on the following information: Selected information from the statement of financial position of MR Company at November 30 and December 31 is presented below. The company uses the perpetual inventory system and all sales to customers are made on credit. November 30 Debit Credit Accounts receivable Prepaid insurance Inventory Accounts payable Wages payable The following cash flow information is also available: 20,000 10,000 14,000 24,000 10,000 16. How much is MR company's sales for the month of December? a. P174,000 P147,000 c. d. P146,000 b. P164,000 December 31 Debit Credit 6,000 15,000 12,000 a. Cash collected from credit customers - P160,000 b. Cash paid for insurance - P 10,000 c. Cash paid to suppliers of inventory - P 120,000 (the entire accounts payable relate to inventory purchases. d. Cash paid to employees for wages - P 20,000 17. How much is the MR company's December cost of goods sold? a. P182,000 c. P121,000 b. P128,000 d. P112,000 30,000 6,000 18. How much is MR company's insurance expense for the month of December? a. P50,000 b. P15,000 c. P10,000 d. P 5,000 19. How much is MR company's wages expense for the month of December? a. P61,000 c. P24,000 b. P42,000 d. P16,000
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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