Bit of a basic question , if there are wrong entries (under/overstated figures in daybooks or ledgers like payables/receivables) do we then correct those using the control accounts rather than the original ledgers where the wrong entry is?
e.g. understatement of £100 in purchase daybook, correct by CR £100 in Payables Ledger Control Account because liability increase?
I just want someone to let me know if my understanding is right and if not or there's anything to add, to help out if possible
So when you do the ETB for a year you do the opening inventory figure first, which as an expense is DR on the P+L.
Double entry:
DR P+L
CR inventory
then when you do closing inventory for the year it's an asset on Financial Position but we do:
DR inventory
CR P+L
I'm a bit confused about that logically because we DR Financial Position after to record it there as an asset but it's not tied up in double entry really , so,
Think i'm mainly just unsure about the reasons for that last double entry.
I understand how to value closing inventory ( lower of cost or sale) and opening (purchase + COGS - closing) but I don't get the logic of a lot of it.
I'm also unsure about the opening calculation (purchase is raw resale items, plus the cost of the goods you sold? minus last years stock? I would have thought it would be last years closing inventory + purchases and then minus what you've sold..
If anyone can give help that would be great :)
I've uploaded image of the original question and answer, why is the 12,000 not included as a b/d balance in the bank/cash account? I thought it wasn't emptied as totals run from one year to the next
(EDIT: Level 3 FAPS)
Hi, as title suggest, i'm looking to see if anyone would be kind enough to walk me through the answer to this. I've posted the answer as the second image.
My workings were:
dr 11250 for bank (because that's already paid)
cr 1500 for the prepaid rent (because 2250 for the Quarter is 3 months and it's 2 over the financial year so /3 and get rid of the 2 months of april + may which is 1500)
dr 750 for accrued rent expense
(though now i think that bank payment would cancel it if it was already accrued so if that's a DR in rent expense then cr 750 on this account and dr accrued expense to delete that ; so ultimately this is cr 750 instead?)
I don't know if i should include admin expense just because it's given to me so leaving it for now
the transfer to P+L is the difference so 11250 - (1500+750) = 9000 CR on rent account
DR on p+L as an expense.
Which seems to line up?
Is my logic right here? (honestly I think the accrued rent is what tripped me up)
What is the difference (and what do i do differently) between depreciating something in the year of sale vs the year of purchase?
As title says, wondering if that last question is wrong as i worked it out to be 6500/12 = 541, and 6500/18500 = 0.35 (35%).
Why then is de minimis not applicable?
(Big green streak is to get rid of personal info )
Hi, found this example on the Gov website but honestly cannot wrap my head around how benefit payrolling works, and AI lies to you so much that I don't just want to ask gemini (it recently tried to convince me that VAT registration was inclusive....)
I'm mainly struggling with everything past the point of the employer paying for the health insurance, I'm uncertain how it affects employee pay or tax. the net isn't deducted from employee as boss pays for it, so does the employee pay the tax on it? is that the adjustment mentioned?
But rather than deduction it says the employer 'adds to employee monthly pay' for tax.
So does the employer pay the net cost, then pay the employee the VAT on it, then that increases their PAYE +NIC paid?
Very confused, help appreciated
Hate to ask for so much help here but:
Basically for partially exempt businesses (selling mix of taxable and exempt supplies) I understand that for input vat relating to expenses such as rent, utilities, that cannot be directly attributed to either exempt or taxed supplies, you can carry out the residual income test.
However,
for de minimis test, I am unsure as to whether this applies to the residual input (relating to both supplies but excluding that which can be directly attributed to exempt) or for both the non direct and the direct input.
I've seen it say all input , so basically both of these?
Thanks 😄
Hi,
i'm struggling a little with the future turnover test for VAT because i'm unsure which is correct:
I know that if , say, my taxable turnover is at £70k and I have a contract that will create a sale in the next month for £50k then I fail the future test as that month alone will push me over.
And i've been taught that huge sales like that are the way it works.
But if I have £16k a month regular turnover and i'm in May (so currently i'm at £80k) and I know that next month will push me past the £90k limit, does that still count at failing the future test? I think with regular monthly turnover like that it's assumed that it's by the end of the month that it will push past it,
and i've seen differing answers on whether it fails future or historic test mainly.
Does knowing that your regular pay will push it past the limit count as 'reasonable grounds' for believing you'll exceed it?
Or does it not count because it's not set in stone that you will get that amount.
I think it's debatable but need to know what AAT think because it changes the date by which you need to register, and thus the answer to a question!
Thanks 😄
As stated in title, if you guys could give me any help or advice regarding this, because everything I calculate is just nowhere near these answers. I know what the correct answer is from the mark scheme I have but I don't understand how it got there.
Thanks!