Financial Accounting - Accruals
hey...an accounting question! have been looking at this for a few hours now and i have a few questions about it
At 1 July 20X0 Rochelle had an opening balance for telephone charges accrued
of £150.
In the financial year ended 30 June 20X1, Rochelle paid the following amounts
for telephone:
Date paid Amount (£) Period
Telephone
01/08/X0 300 3 months to 31/07/20X0
01/11/X0 360 3 months to 31/10/20X0
01/02/X1 450 3 months to 31/01/20X1
30/06/X1 420 3 months to 30/04/20X1
On 1 August 20X1 Rochelle paid £420 in relation to the 3 months ended 31 July
20X1.
Should the opening balance for the telephone charges accrued of 150 not be 200? Since the year end is 30 June X0, the invoice being recieved in August X0 for the months of May, June and July being 300; divide it into the 3 equal parts gives us 100 per month telephone expense...so knowing that we never recorded the expense of May and June and needed to do an adjustment now that we have the invoice it would have been a 200 accrual, not 150? Maybe i have just been staring at it too long...can someone help me out, thanks i really appreciate it!
At 1 July 20X0 Rochelle had an opening balance for telephone charges accrued
of £150.
In the financial year ended 30 June 20X1, Rochelle paid the following amounts
for telephone:
Date paid Amount (£) Period
Telephone
01/08/X0 300 3 months to 31/07/20X0
01/11/X0 360 3 months to 31/10/20X0
01/02/X1 450 3 months to 31/01/20X1
30/06/X1 420 3 months to 30/04/20X1
On 1 August 20X1 Rochelle paid £420 in relation to the 3 months ended 31 July
20X1.
Should the opening balance for the telephone charges accrued of 150 not be 200? Since the year end is 30 June X0, the invoice being recieved in August X0 for the months of May, June and July being 300; divide it into the 3 equal parts gives us 100 per month telephone expense...so knowing that we never recorded the expense of May and June and needed to do an adjustment now that we have the invoice it would have been a 200 accrual, not 150? Maybe i have just been staring at it too long...can someone help me out, thanks i really appreciate it!
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