Can someone explain?
Zeeshan_Ajaib
Registered Posts: 6
Why are we subtracting the accruals of expenses at the start of the financial year from the carrying amount of the non-current asset and then adding the accruals of expenses at the end of the financial year?
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Comments
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you accrue expenses at the end of the period & then reverse them at the beginning of the next period...0
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The accruals B/fwd are the accruals that were made in the previous years accounting records.
So for example, you could have had a telephone bill for 1200 which was for the period Feb, Mar and Apr x8. In this case 800 would belong in March x8 accounts but the money would not be taken out until after that year end.
To follow on, the telephone bill for Feb-Apr x9 could have been 900 but this would have been paid in next years accounts so you need to do an accrual of 600.
AAT Level 2&3 - 2016
AAT Level 4 - 2017
Personal Tax, Business Tax and External Auditing
ACA/CTA -
Certificate Level - Jan 20190 -
Hi
Accrals and prepayment are temporary ledgers that are used only at the end and start of the year0
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