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Accounting
The lease on the building is for two years, so it is highly unlikely that this is a finance lease. It does not appear that the Large Mart is going to take ownership of the building. Thus, since this is not a finance lease, the journal entry would simply record the rent. There is no opening entry, just an expense.
621 Rent Expense
101 Cash at bank
The wages show as a journal entry at the end of the month. Because the employees were not paid, the wage expense shows as the creation of a liability. The liability account is later offset when the two are paid.
624 Wage Expense
204 Wages Payable
204 Wages Payable
101 Cash at Bank
Well the first to do is have a chat with the audit department about that $12,000 trip to China. It does not cost that much, unless he's buying some luxury...
But as far as the journal entries, the key is deciding how to classify this bed. An oversized $40,000 bed is not inventory; it is part of the store fixtures. The closest thing is machinery/equipment, since that category is fairly vague. Given the categories provided, the China trip is a salary expense. But that is only because there is no category for marketing or administrative expenses. Not sure why there wouldn't be a category for that.
164 Machinery/Equipment
40000
202 Accounts Payable
40000
624 Wage Expense
12000
202 Accounts Payable
12000
4. The inventory order is not recorded until the inventory is received -- you need to have that certainty about delivery before you record it because without delivery there…
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Such adjusting entries will help to improve the accuracy of financial statements. Adjusting entries is necessary because accrual accounting systems demand that the events are recorded accurately. They are not to be recorded strictly on the basis of cash transactions, and all of these adjustments serve to translate the accounting figures that arise from the cash accounting to accrual accounting by incorporating all of the different non-cash transactions and ensuring
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