Quick question...

amyjayne27

Hi all,

Im doing the short test 2 for FRA Unit 5 - The extended trial balance.

I can do most of it, but the thing I am stumped on is this:

Carriage of £5144 in included in the trial balance ( I have put this on the debit side)

But on the notes, carriage inwards is £2211 and carriage outwards is £2933. How do I go about recording this? I think I need to create 2 new accounts, carriage inwards and outwards, and then put these entries in again next to carriage in trial balance to balance this? But then where does it go in the profit and loss? Im confused?

Any help would be great, sorry if this doesnt make sense, I just havent come across this type of thing!

Amy

Rinske

http://forums.aat.org.uk/showthread.php?t=18156&highlight=short+test

Is this any help?

amyjayne27

Hi Rinske,

Yes it does thank you, my question is just slightly different. I have the extra bit of carriage outwards as £2933. I would have to account for this in the journal aswell, is this right?

The answer given in the link for the journal is:

Dr carriage in 2211, Cr carriage out 2211. Does this account for the £2933? Maybe im too tired as I am not really understanding!

Also, in the ETB, I have listed the cariiages seperately in the trial balance, and then have put them both as debits in the P & L. Is this right? As I cannot get it to balance!!

Thank you in advance, Amy

Rinske

Hi Amy,

I haven't got the questions myself, as I never did FRA via Premier training, but I think the point is that the 2933 and the 2211 need to be separated.

You got one account now called carriage, I think they changed it to carriage out instead of journalling both out of the carriage account.

If you credit that one with the carriage in (debit it to the carriage in), you can leave the rest in there as carriage out.

But as long as they are separated (and debit) it should be ok.

Then carriage in is part of the cost of sales, so should go in the top of your P&L account before gross profit.
Carriage out is an expense in the part under gross profit.

I'm not sure why the trial balance doesn't balance, but have you checked that you only got these two figures left for carriage now? Could it be you missed something else or that you have too much carriage left somewhere?

If my trial balance didn't balance, I used to go back and see if I had every account given listed for the right amount and checked all my adjustments to see if I did add all the adjustments twice (double entry principle). But I'm not sure what other advice I can give you.

I hope this helps, although I'm afraid without the question it's very hard to say.

Cheers,
Rinske

amyjayne27

Hi Rinske,

Thanks again for your answer.

I am still stumped, my net profit will not balance by £70!

So instead of carriage being shown as £5144 in the trial balance I have 2 columns now, carriage in £2211 debit side and carriage out £2933 alos debit side. This I have down under the 'trial balance' column, not adjustments column. Right, so my trial balance bit balances, so does my adjustments. Its just the P & L and balance sheet, the net profit I cannot get to balance!

Maybe its the provisons for doubtful debts? Ive struggled on this bit. It says to increase it by £40, so I have put this next to provision for doubtful debts as a credit and under the provision for doubtful debts: adjustment as a debit. I have then posted the £40 to P & L as a debit, and added the 2 provisions to the balance sheet as a credit. Is this making any sense?!

Sorry to rack your brains, I thought I understand the ETB, but obviously not!!

Thanks again,

Amy

amyjayne27

Hoorrayyy I have just figured it out! Stupid me I posted depreciation to P & L as £8770 instead of £8700!

Thanks so much for your help Rinske, it really helps to ask someone sometimes!

Thank you!

Amy