ACCRUAL CONCEPT EXEMPTION

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi everybody,<BR>As we all know, an accural is an amount due in an accounting period which is unpaid at the end of that period,the reason for this is to ensure that the P&L records every cost that has been incurred for the year.<BR>However here is a example i am not sure how to deal with?<BR>A firm has a overdraft facility for £50,000, interest is calculated as follows:<BR><BR>borrowing up to and £50,000 interest 8% per annum<BR>borrowing over £50,000 interest 29.5%per annum<BR><BR>every three months the interest will be ducted from the bank account<BR>let get into the point , if the accounting period is finished on 28/02/XX,and interest will be ducted on 31/03/XX,so my question is how can we calculate accural amount of bank interest for 28/02/XX?<BR>My personal opinion is impossible, what do you think guys?<BR>

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    ACCRUAL CONCEPT EXEMPTION

    Hi.<BR><BR>You just need to calculate two months interest as the accrual.<BR><BR>Scott.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    ACCRUAL CONCEPT EXEMPTION

    Hi scott,<BR><BR>Thank you for your suggestion , but i still think it is very diffcult ,supposely during these two months you maybe borrowed over your overdarft facility for some time ,and sure you still can do it ,but overall i think take too much time not worthy it ,what do you think ?<BR><BR>chaoliss
  • System
    System Posts: 100,534 🤖 Admin 🤖
    ACCRUAL CONCEPT EXEMPTION

    Isn't the answer £666.66 to be accrued for at the year end!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    ACCRUAL CONCEPT EXEMPTION

    Hi <BR><BR>i think your answer is only for up to and £50,000,my question is if over £50,000 maybe only for few days what i shold do ? i guess we can calculate on the base of 29.5% by days , but still too much work am i right?<BR><BR>Thanks

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