M2 Assignment Module 2 Assignment: The Following Are The Tra

M2 Assignmentmodule 2 Assignment: The following are the transactions for Smith Construction for the month of June

Smith Construction's accounting records for June include various transactions affecting its financial position. These transactions, along with the balances from May, must be properly journalized, posted to T accounts, and used to prepare a trial balance as of June 30, to ensure the accuracy and completeness of the company's financial reporting.

Paper For Above instruction

Financial accounting is a fundamental aspect of business management, enabling organizations such as Smith Construction to record, analyze, and report financial information. The provided transactions for June illustrate core accounting principles, including recording journal entries, updating T accounts, and preparing financial statements.

The journalization of transactions involves recording each event in the company's books with appropriate debits and credits. For example, when Smith sold common stock for cash, it increases cash and equity; purchasing supplies on account increases supplies and accounts payable. These transactions are then posted to T accounts, which visually organize the ledger accounts by debits and credits, ensuring that the accounting equation remains balanced.

The journal entries for the month of June begin with the sale of common stock, where Smith received cash. Supplies were purchased on credit, requiring the recording of an increase in supplies and accounts payable. Work performed on an addition resulted in a cash inflow, increasing cash and service revenue. Payments for tools, repairs, rent, wages, and dividends are recorded as decreases in cash and increases in respective expense or dividend accounts.

Building a deck and installing a garage door are recognized as revenue-generating activities, with the former billed to the customer and the latter received in cash. Bills sent to customers are recorded as accounts receivable, with subsequent collections increasing cash. Payments to suppliers and for expenses reduce cash, and dividends paid reduce retained earnings directly.

After journalizing all transactions, posting to the T accounts involves updating debit and credit balances to reflect each event. The T accounts for Cash, Accounts Receivable, Accounts Payable, Service Revenue, Supplies, Equipment, Tools, Common Stock, Salary Expense, Rent Expense, Repair Expense, and Dividends increase or decrease according to the recorded transactions.

Finally, preparing a trial balance summarizes all account balances to verify that the sum of debits equals the sum of credits. This step confirms that the books are in balance prior to the preparation of financial statements, facilitating accurate reporting of Smith Construction's financial position as of June 30.

References

• Choi, F. D. S., & Meigs, W. B. (2019). Financial Accounting. McGraw-Hill Education.
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