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hi i dont understand one question here. plz guys answer it.
At 1st september the motor expenses account showed 4 months insurance prepaid of 80$ and petrol accrued of 95$. During september the outstanding petrol bill is paid plus further bills of 245$.At 30 september there is a further outstanding petrol bill of 120$.
REQUIRED: the amount to be shown in the income statement for motor expenses for september is?make T account..
open balance 95
other side payments 95+245
c/d balance 120
balancing figure is 365 plus one month insurance 20.thank you very much mate ..you are genius.. can u plz tell me how the balancing figure 365 come?
hmm..
b/d 95 on right side of t account95+245= 340 on left side of T account
c/d 120 on left side.. you will get 460 total of left side.. while balancing both side 365 will be expense figure on left side as 95 is already there.. (95+365=460)I don’t understand …. the question said that we need the expense amount in the income statement .Isn’t your answer the correct answer for payable motor expense that should be in the balance sheet not in the income statement ?
Yes i know that expenses doesn’t show on the balance sheet . What I was saying is that in my opinion your explanation is the correct one for payable motor account not motor expenses account. Maybe I misunderstood the requirement.
can you please produce the correct explanation here ? i want to learn also.. plz
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Hi, I think that the 95 relates to previous month as it was accrued for. So expenses in Sept I/S will only show expenses relevant to Sept ie. 245 + 120 for petrol + 20 for insurance.
Is this correct?
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