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Q:before year end if stocks are received but no invoice is received what substantive to apply?
Q:before year end invoice is received but no stock is yet recived what substantive to be applied?
Q:for prepayments they are paid before the service or product is utilized so if 10 months prepayments are paid cutoff is only 10 months are to be recognised in this year financial statements ? what about next 2 months they are also prepaid in this year rest 8 months are for next year financial statements?
Q1 To detect this look at GRNs for goods received just before period end and ensure that either an invoice was received and processed before period end or that an accrual is made.
Q2 To detect, look at invoices received just before period end and trace to GRN, ensuring it also relates to before year end
Q3 y/e = 31.12.17. Invoice for 12 months rent of $12,000 to 31.10.2017 paid 30.11.2017.
Rent Expense (Dr) of 2,000 for y/e 31.12.17
Prepayment (asset, Dr) of 10,000 on sofp of 31.12.17
Q2: sir if goods are received (grn is for after year end) after year end, but invoice received before year end we would treat in current year or next year ?
Next year. Normally the purchase cut-off is determined by the date the goods are received.