Jacquetta prepares her financial statements to 31 August each year.In the year ended 31 August 20X7 she has received and paid the following gas bills: Jacquetta estimates that gas charges for the period 1.8.X7 - 31.8.X7 will be about £60.
What figure for gas expense should be included in Jacquetta's accounts to 31 August 20X7?

Question

Jacquetta prepares her financial statements to 31 August each year.In the year ended 31 August 20X7 she has received and paid the following gas bills:  Jacquetta estimates that gas charges for the period 1.8.X7 - 31.8.X7 will be about £60.
What figure for gas expense should be included in Jacquetta's accounts to 31 August 20X7?

Quizplus · Accepted Answer

The gas bills for the period 1.9.X6 - 31.7.X7 total £2160 (£540 + £540 + £1080), but they pertain to the period after 31 August 20X6 up to 31 July 20X7, so they are not relevant to the current year financial statements. The estimated gas charges for the period 1.8.X7 - 31.8.X7 of £60 are relevant to the current year financial statements and should be included as a gas expense. Therefore, the total gas expense for the year ended 31 August 20X7 is £60, and the correct answer is D) £2139, which is obtained by subtracting £2160 from the total gas bills paid of £4299.

Jacquetta Prepares Her Financial Statements to 31 August Each Year