Help journals iin Unit 11
carolyn
Registered Posts: 28 Regular contributor ⭐
My question is on page 6 of the mock exam from Kaplan.
In task 1.3, according to further information "interest on the debentures for the last 6 months of the year has not been included in
the accounts in the trial balance. " , I do a journal which is
DR interest 1500
CR interest payable 1500
The answer provided by Kaplan is
DR interest 1500
CR Accrual 1500
However,I have noticed in all of the past exam papers(Such as task 1.1 of June 2009, task 1.1 of Dec 2008 and task1.1 of June 2008)in my revision pack, the answer is
DR interest x
CR interest payable x (which is not included in accrual account)
On page116 of text book 2009/10, it shows the double entry is
DR interest payable(finance cost)
CR Trade and other payables
I am confused which one is correct?
Many thanks
carolyn
In task 1.3, according to further information "interest on the debentures for the last 6 months of the year has not been included in
the accounts in the trial balance. " , I do a journal which is
DR interest 1500
CR interest payable 1500
The answer provided by Kaplan is
DR interest 1500
CR Accrual 1500
However,I have noticed in all of the past exam papers(Such as task 1.1 of June 2009, task 1.1 of Dec 2008 and task1.1 of June 2008)in my revision pack, the answer is
DR interest x
CR interest payable x (which is not included in accrual account)
On page116 of text book 2009/10, it shows the double entry is
DR interest payable(finance cost)
CR Trade and other payables
I am confused which one is correct?
Many thanks
carolyn
0
Comments
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Interest payable, Accurals and Trade payables are all the same thing.
On the balance sheet (or whatever it's called now) all 3 of these go in the 'Trade Payables' bit under current liabilities.
It's just the wording of it0 -
I use;
DR Finance Costs 1500
CR Accrual 15000 -
You wouldlnt put it as accural in the account but just credit Liabilities in the b/s (show a working when you come to do the account)
I.E wk10 -
I personlay would do
Dr Intrest
Cr Intrest Payable
My understaning of an accrual is when you pay something after the close of year end that then puts the cost in to the new financial year when realy it relates to the old financial year.
All trhe question says is it's been omitted from the accounts not that it has been paid in the new financial year.0 -
im sticking to the kaplan book0
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Intrest Payable, Accruals and Trade payable are not the same thing they all tend to go together as one title in the balance sheet but when it comes to journals or evan in the extended trial balance(Intemediate Level) they need to be listed separately, as each account refers to diffrent types of payments.dobbieobby wrote: »Interest payable, Accurals and Trade payables are all the same thing.
On the balance sheet (or whatever it's called now) all 3 of these go in the 'Trade Payables' bit under current liabilities.
It's just the wording of it0 -
I know that! But in this exam it all goes under 'Trade Payables' I was just trying to help!0
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lilac_angel wrote: »Intrest Payable, Accruals and Trade payable are not the same thing they all tend to go together as one title in the balance sheet but when it comes to journals or evan in the extended trial balance(Intemediate Level) they need to be listed separately, as each account refers to diffrent types of payments.
But this accrul we know its to do with interest and thats why we dont add it to accruals and add it directly to interest payable in the balance sheet but we each do it our own way and as long as you show how you came to your answer they will understand0 -
It's not an accrual tho. the figure has just been left out of the accounts it has already been paid within the current year.But this accrul we know its to do with interest and thats why we dont add it to accruals and add it directly to interest payable in the balance sheet but we each do it our own way and as long as you show how you came to your answer they will understand0 -
at Kaplan we've been given examples like that and been told to Dr Accruals in the SFP0
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I was taught to Dr Intrest and Cr intrest payable, which is what all the past papers do aswell.
As it's been left out the accounts not paid late.0 -
i suppose it wouldn't matter as it still goes in the same place on SFP. Probably get a mark for either method0
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lilac_angel wrote: »It's not an accrual tho. the figure has just been left out of the accounts it has already been paid within the current year.
Didnt i say that?0 -
<<nods quietly0
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0
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My question is on page 6 of the mock exam from Kaplan.
In task 1.3, according to further information "interest on the debentures for the last 6 months of the year has not been included in
the accounts in the trial balance. " , I do a journal which is
DR interest 1500
CR interest payable 1500
The answer provided by Kaplan is
DR interest 1500
CR Accrual 1500
However,I have noticed in all of the past exam papers(Such as task 1.1 of June 2009, task 1.1 of Dec 2008 and task1.1 of June 2008)in my revision pack, the answer is
DR interest x
CR interest payable x (which is not included in accrual account)
On page116 of text book 2009/10, it shows the double entry is
DR interest payable(finance cost)
CR Trade and other payables
I am confused which one is correct?
Many thanks
carolyn
Just realised, thats the mock i sat on friday!0 -
Just relised why the heck is it in trade and other payables anyway ??? its a finance cost nothing to do with creditors ?????0
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lilac_angel wrote: »because it's money you owe
Yeah but its a loan cost not purchase?
I think you may have to double check your book???0 -
its a current liability. the book and past answer say it is0
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messedup89 wrote: »its a current liability. the book and past answer say it is
Yes but loan interest have nothing to do with trade and other payables thats what am saying???0 -
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The payments of the loan it's self is a non current liability as it is paid over many years.Yes but loan interest have nothing to do with trade and other payables thats what am saying???
However the intrest owed is just for six months so therefore is a current liability and not a non current liability.0 -
messedup89 wrote: »accrual
According to their revision pack it is thats what got me confused:-
Originally Posted by carolyn
My question is on page 6 of the mock exam from Kaplan.
In task 1.3, according to further information "interest on the debentures for the last 6 months of the year has not been included in
the accounts in the trial balance. " , I do a journal which is
DR interest 1500
CR interest payable 1500
The answer provided by Kaplan is
DR interest 1500
CR Accrual 1500
However,I have noticed in all of the past exam papers(Such as task 1.1 of June 2009, task 1.1 of Dec 2008 and task1.1 of June 2008)in my revision pack, the answer is
DR interest x
CR interest payable x (which is not included in accrual account)
On page116 of text book 2009/10, it shows the double entry is
DR interest payable(finance cost)
CR Trade and other payables0 -
that wasn't in the revision pack. That was taken from the recent mock paper.
But in the kaplan tuition and revision packs it says accrual.
Maybe we should ask someone who knows better than us?0 -
On page116 of text book 2009/10, it shows the double entry is
DR interest payable(finance cost)
CR Trade and other payables
Check your book again0 -
Steve Collins should be able to clear this up for us0
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lilac_angel wrote: »The payments of the loan it's self is a non current liability as it is paid over many years.
However the intrest owed is just for six months so therefore is a current liability and not a non current liability.
Agreed but it still has nothing to do with trade and other payables.
Yes please steve could you clear this up0 -
My books are Osbourne books and i can't remeber off the top of my head what mine say. but i know that all the AAT past papers say Dr Intrest Cr Intrest PayableOn page116 of text book 2009/10, it shows the double entry is
DR interest payable(finance cost)
CR Trade and other payables
Check your book again0
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