Could I get some assistance with year end issues and accounting concepts? Watch

amm120
Badges: 0
Rep:
?
#1
Report Thread starter 4 years ago
#1
Hi,

I'm asked to explain whether or not an accounting adjustment is needed for each query, setting out the workings for the amounts, t accounts and entries required, with reasoning.


I'm not really sure how to start out.

The first question;

Year end is June 30th 2014. Electricity bill of £600 for the quarter to July 31st in august 2014. She has accounted for all the expenditure in the year starting 1st July 2014.

What needs to be adjusted? I'm a little confused as to what they are asking of me.

Any help would be met with a gratitude unmatched. Thank you

*this is probably in the wrong section...* Looking for the right one. I just noticed the section.
0
reply
NAJC
Badges: 0
Rep:
?
#2
Report 4 years ago
#2
Accounting statements are prepared under the accrual basis, at least in UK GAAP and IFRS language.

The note tells you that they paid for a bill for the period 1 May 2014 to 31 July 2014 after the year end. As such, the bill was unpaid during the accounting period and so an accrual needs to be created for the amount, with the corresponding entry going to the relevant expense account.

Furthermore, please note that items such as prepayments, accruals and closing inventory are all year end adjustments, including the one you describe above.
0
reply
X

Quick Reply

Attached files
Write a reply...
Reply
new posts
Back
to top
Latest
My Feed

See more of what you like on
The Student Room

You can personalise what you see on TSR. Tell us a little about yourself to get started.

Personalise

Have you made up your mind on your five uni choices?

Yes I know where I'm applying (9)
64.29%
No I haven't decided yet (3)
21.43%
Yes but I might change my mind (2)
14.29%

Watched Threads

View All
Latest
My Feed