Test VII - Final Exam

Shehla Shehgarlynn operates a taxi company known as the Shehgarlynn's Taxi Co. The beginning balance of her accounts as of January 1, 2013 as follows:

Cash.....................................$76,500
Supplies .....................................800
Automobile ...........................15,000
Accounts Payable..................33,000
Capital...................................10,500

The transactions of the firm during the month of January appear below:

1. Paid balance owed to the creditor.
2. Income (cash) for the month, $8,500
3. Paid wages for the month, $2,100
4. Paid for advertising, $150
5. Purchased an additional used taxi for $7,500, terms half in cash and the balance on account.
6. Paid $475 for maintenance of automobiles.
7. Sold $150 of our supplies at cost as an accommodation.
8. Shehla withdrew $950 for personal use. 
9. Inventory of supplies at the end of the month was $425 (used).

Prepare the following:

1. Journal Entries
2. General Ledger
3. Trial Balance
4. Financial Statement

What is Interim Reports?

Interim Reports - is also known as financial statement. An organizations may prepare financial statements for period of time that are less than the accounting periods.

An interim statement is prepared for a period of time other than a fiscal year or calendar year.

Examples of interim statements are statement prepared for 6 months, 3 months, or even monthly periods. Regardless of the periods of time covered by the individual financial statements.

The accountant maybe called to prepare various statements to satisfy the needs of government (federal, state, and local) as well as other interested parties.

What are Financial Statement?

Financial Statements - are prepared at least once a year. This is known as the accounting period.
An accounting period may follow the calendar, in which case it begins on January 1 and end on December 31 of the same year.

The business is then said to have a calendar year accounting period.

Any business that has an accounting period consisting of 12 months other than a calendar year is generally known as a fiscal-year accounting period.

Financial Statement is also known as Interim Reports.

Basically three financial reports are prepared:

1. Income Statement - A financial statement that presents revenue and expenses and the net income or loss for a specific period of time.
2. Statement of Owner's Equity (Capital Statement) - A financial statement that shows the change in the value of the ownership in a business over a period of time. The change in capital is due to income or loss and withdrawals by the owner over a period of time.
3. Balance Sheet - A financial that shows the financial position of a business at a particular moment in time a detailed presentation of the assets, liabilities, and owner's equity. Actually, it is a detailed accounting equation, in which the total value of assets is equal to the liabilities plus proprietor' capital.

Financial Accounting (7th Edition) by Libby, Robert/ Libby, Patricia/ (Google Affiliate Ad)