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Hallo,
I’m trying to explain part of a text in an example, I can’t understand to which period it relates.
The example says:
At 1 October 20X5, the following balances were brought forward in the ledger accounts of XY: Electricity account Cr $800 – this is the period in months, that I am not sure about, which months exactly are included in the $800.
The example continuous:
5 November 20X5 $1,000 (for the period to 31 October 20X5)
10 February 20X6 $1,300 (for the period to 31 January 20X6)
8 May 20X6 $1,500 (for the period to 30 April 20X6)
7 August 20X6 $1,100 (for the period to 31 July 20X6)
At 30 September 20X6, the electricity meter shows that $900 has been consumed since the last bill was received.I have the solution, but I don’t understand the months of the $800, which do you think they are, are they Aug, Sept., Oct. 2005, but if it is so, then this is also included in the Nov $1000, which is given above, or is it only Aug and Sept. 2005, or is it July, Aug and Sept. 2005?
Thank you very much!
Since they are receiving bills every 3 months in arrears – for the quarters to end January, end April, end July, and end October – the $800 can only be the estimate for the 2 months August and September 2005.
John , again me 🙂
ann owns two properies which it rents to tenants. in the year ended 31.12.2006
it received 280000 in respect of property 1 and 160000 in respect of property 2/ balance on rental account
31.12.2006 31.12.2005
property 1 13400dr 12300cr
property2 6700cr 5400drwhat amount should be credited to income statement for the year endd 31.12.2006
in respect of rental income.?
I can’t define these…
1) what is opening prepaid income
2)what is opening accued income?
3)what is closing acrued income?Opening prepaid income is rent we received the cash for this year, but is this years rent.
So at the start of the year we owed it back to them – it is the credit balance.Opening accrued income is rent that was owing to us at the start of the year – it is the debit balance.
Closing accrued income is the amount we were owed at the end of this year – it is a debit balance.
thanks for this question
John i cant undertand proforma income t account
why income statement is recorded on the debit side, and cash on the credit side of this proforma?
When you receive income, then entry is DR Cash and Cr the income account.
At the end of the year, the total is transferred to the Income Statement T’A/c:
Dr Income Account, Cr Income Statement A/c.The balance on the income account is now zero and the same account can be used to record next years income.
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