Accruals and Prepayments (part d) – ACCA Financial Accounting (FA) lectures
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If Actual bill is less than accrual (estimated time) then the difference between actual and estimated will be taken as income this year?
If Actual bill is more than accrual (estimated time) then the difference between actual and estimated will be taken as increased this year?
Kindly confirm.
If bill is less than the estimated, then obviously we have paid more than required and vice versa.
Kindly confirm.
I mean if actual bill is less than estimated then obviously, we have expensed out more last year which should be reversed this year.
Hi,
Are all the FA lectures and notes up to date for the 2024 syllabus?
I know some things were removed/added in September.
Thanks.
Yes – all of our lectures for all papers are up-to-date for the current syllabuses.
Thank you for confirming John!
I have query about the 950 Cash you have debited under telephone account. I believe this expense was already recorded for previous year telephone expense i.e. 3 months to 31 March 2001 however not paid. This year there should be only reversal for accrual by crediting the cash account for 950. kindly confirm. thanks .!
Although it would end up with the same result, the correct way of dealing with it is as explained in the lecture. Whenever cash is paid the bookkeeper will deal with it in the normal way.
Thank you John! You truly are a godsend.?
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The page 24 of FA notes about (b)Accruals:
1.Reverse any Accruals brought forward:
DR Accruals Account
CR Expense Account(e.g. Telephnoe,Electricity)
I want to know,why the CR is not cash?
We credit cash (and debit the expense account) when the cash is actually paid. (Have you watched the whole series of lectures on this topic?)
John, this is probably a silly question but how would we deal with an issue where the electricity and water expense is combined and appears as one figure yet we are asked to determine electricity accrued. Do we just simply add it to the amount stated?
Thank you.