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Hi sir,
I couldn’t understand questions such as 32.3 in that why rent received at the beginning of the year not included in the cash received during the year?
Sir, please also help to explain choice B of 32.4 in BPP kit. It says transferring cost of repairs to Purchase and wages account, why isn’t it correct to credit repairs and debit purchase and wages? I thought we should increase cost in purchase and wages and decrease it in repairs. Could you please help. Thank u!! 🙂
Q 32.3
If rent has been received in advance then it means that the cash for some of this years rent was received last year. They will not receive the same amount again this year.
(Have you watched my free lectures on this?)Q 32.4
Entry B is the wrong way round.
If they use materials and labour to do repairs, then the cost should be transferred to the repairs account. It is an expense and so the repairs account should be debited.
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