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John Moffat.
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Elitoe
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On the trial balance (ends at the end of it states that a company paid 22500 in insurance.However in the sub question it states ‘ An annual insurance premium was made on 1 Oct 2019 for 12 months to 30 September 2020. The 12000 is included in the insurance figures shown in the Trial Balance’. How would i use this information in a statement of comprehensive income
https://imgur.com/a/IdT1lMO The link shows the question
John Moffat
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9 months of the insurance payment of $12,000 (i.e. $9,000) is a prepayment and is not an expense of this accounting year. Therefore the insurance expense on the SOPL needs to be $9,000 lower than the amount on the trial balance.
Have you watched my free lectures on accruals and prepayments? The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
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