Accrued Expenses

AnnaFeAnnaFe Registered Posts: 2

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  • AnnaFeAnnaFe Registered Posts: 2
    Could someone help me to calculate the point C & D please ?
  • CheesypeesyCheesypeesy MAAT Posts: 102
    edited June 18
    One month of the bill for quarter ending 31 May X7 relates to this financial year, so one month's worth needs to be accrued into this year. £1,995 * 1/3 = £665 adjustment dated 31 March X7. This will increase this year's expenses and decrease next year's.

    For d), an accrual was made last year, which we can now subtract from our total expenses this year (we paid it this year but it relates to last year). Therefore, the admin expenses for this year are 14,215 - 620 + 665 = £14,260.
    Matthew Dearlove MAAT
    Currently on CIMA Management Level. Passed P2, F2 and E2. Preparing for November 19 MCS.
  • ncacatncacat United KingdomRegistered Posts: 39
    @Cheesypeesy 's short and sweet calculation.

    May I ask how is the answer presented for the question?

    Just curious.
    The administration expense account needs an adjustment for ____________ of £45 (665-620?) dated 31 March 2017 (?)

  • CheesypeesyCheesypeesy MAAT Posts: 102
    I do try! I don't have access to the questions since I'm not a student, but I suspect it'll be something like:

    The administration expense account needs an adjustment for an accrual of £665 dated 31 March 2017.

    The reversed accrual of £620 was already made at the beginning of the current year.
    Matthew Dearlove MAAT
    Currently on CIMA Management Level. Passed P2, F2 and E2. Preparing for November 19 MCS.
    ncacat
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