Acca financial Accounting (FA) Study Text ac ca (FA)

Chapter 10 

KAPLAN PUBLISHING

 

181 

 

Test your understanding 3 

 

On 1 January 20X5, Willy Mossop owed $2,000 in respect of the 

previous year’s electricity. Willy made the following payments during the 

year ended 31 December 20X5: 

•

 

6 February $2,800 

•

 

8 May $3,000 

•

 5 

August 

$2,750 

•

 

10 November $3,100 

At 31 December 20X5, Willy calculated that he owed $1,800 in respect 

of electricity for the last part of the year. 

What is the electricity charge to the statement of profit or loss? 

A $1,800 

B $11,450 

C $11,650 

D $13,450 

 

 

5 Accrued 

income 

 

 

Accrued income arises where income has been earned in the accounting 

period but has not yet been received. 

In this case, it is necessary to record the extra income in the statement of profit 

or loss and create a corresponding asset in the statement of financial position 

(called accrued income): 

Dr Accrued income (SFP)  

$X 

Cr Income (P/L)  

$X 

Accrued income creates an additional current asset on our statement of 

financial position. It also creates additional income on our statement of profit or 

loss, and hence this will increase overall profits. 

 

 

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