Financial Statements

Deferred items are those where money has either been paid out in advance of goods being received/work being done, or where money has been received in advance goods being sold/work being done.

If the money has been paid out before receiving the goods or services, this is known as a deferral of expense.

If the money has been received before it is earned, this is known as a deferral of revenue.

Record it as an expense.

That method is called account form of balance sheet and on the other hand there is another form of balance sheet which is called statement form.

Assets are listed in order of liquidity, or how quickly they can be converted into cash. Fixed Assets (Land, Buildings, Machinery, etc.) take longer to sell than stocks and bonds. Accounts Receivable will turn into cash in 30 days (for the most part) etc. Inventory will turn over several times in a year.

The assets listed first are "Current Assets" - things that wil be used within the fiscal year. Fixed Assets have a longer life. This is similar to Current Liabilities (amounts due within 12 months) and Long-term Liabilities (amounts due beyond 12 months).

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Indemnity always goes to the credit side.

They Don't go on the balance sheet unless they are currently earned but owed at a later date. When paid out at the time they are earned they would be assigned to the Income & Expense statement as.The purpose of the trial balance is (historically) to verify if any errors were made with posting the journal entries to the ledger. Every journal entry makes debits and credits to (at least) two.

Balance Sheet

Yes, what about rent in advance?

don t known

The reader must be aware of which of the alternative generally accepted accounting practices have been used.

entries for Reserve & surplus

Net Profit is placed in the Credit Side of the Profit & Loss A/c. of the Company and added to the Capital in the Asset Side of the Balance Sheet.

Value of Inventory is an asset on the balance sheet.

because it needs to be repaid

Sales revenue is all the money from your sales. BUT profit is how much money you actually make after considering rent and other expenses. So you should never get carried away by sales revenue because if you sell something worth $900,00 you will think you made $900,00 when you really only make the money after expenses

Variable

The blance sheet. It'll be in the last section in Equity.

Administrative expenses are part of income statement and shown there and not in balance sheet.

The contents of a trial balance will be your assets, liabilities, and equity accounts and all your ledger (temporary accounts). This is to check for accuracy in your ledger accounts and that your financial statements "balance out'. After you do your "trial balance" you then close your books for the year, closing all temporary accounts which include expenses and revenue (income). Once this is complete you prepare a Post-Closing Trial Balance (post-closing meaning "after closing"). This is to double check that all ledger accounts are closed properly and that your financial statements balance.

1

Paying by cheque is a cash transaction.

Assets:

debit =increase

credit=decrease

invoice or bill

No

Debit cash / bank xxxx

credit building account xxxx