FRA June 2006 1.2

Paula1987

Hello,

On the above past paper, where does the figue £260 come from, for the Accrual? I have 390, which it states in the question.

Can anyone help please?

Paula :001_unsure:

jenz496

The £390 is fr the three months February, March, April (the quarter), however the year end is March. Therefore only 2 out of the 3 months are accrued. £390/3 * 2 = £260.

ambitious

This was a payment for expenses made in May 2006. Accounts are being prepared for up to end of March. But this payment is for the "quarter" (i.e. 3 months of a year) ended 30 April so this payment covers expenses for Feb, Mar and April. As the accounts are relevent for end of March we need to chop this figure into the 3 months (ie divide evenly!) then work out the accruals up to March.

so 390/3 = £130 per month. For the months of Feb and March thats
130 x 2 = £260 of accruals.

Paula1987

Thanks very much, i understans now ) :thumbup1: