CIMAPRA17-BA3-1 Exam - Topic 1 Question 93 Discussion

Actual exam question for CIMA's CIMAPRA17-BA3-1 exam

Question #: 93
Topic #: 1

Refer to the Exhibit.

A company is preparing its accounts to 30 April 2006. The latest telephone bill received by the company was dated 31 March and included call charges for the quarter 1 December to 28 February. The amount of the bill for call charges (excluding VAT) was $960. Most of the company's telephone bills are for similar amounts.

Which of the following journal entries should be made to the company's accounts at 30 April 2006?

The journal entries which should be made to the company's accounts at 30 April 2006 is

Show Suggested Answer

Suggested Answer: B

by Janae at Jul 18, 2024, 08:09 PM

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Vallie

6 months ago

Are we sure those call charges are typical? Seems high!

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Shay

6 months ago

I think option B makes the most sense here!

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Sena

6 months ago

Wait, why are we considering a bill from March for April's accounts?

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Jettie

7 months ago

Definitely need to account for that $960.

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Glory

7 months ago

The bill was for the quarter ending 28 February.

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Margurite

7 months ago

I think the journal entry should reflect the total amount for the quarter, but I'm not confident about the exact accounts to use. I hope I remember the right ones!

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Hubert

7 months ago

I feel like the amount of the bill is a bit tricky since it covers a different period. Should we just take the average of the previous bills or something?

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Ashton

8 months ago

This question seems similar to one we practiced about recording utility expenses. I think we need to consider the period the expenses relate to, right?

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Kanisha

8 months ago

I remember we discussed how to handle accrued expenses in class, but I'm not sure if the bill should be recorded as an accrual or just as an expense.

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Agustin

8 months ago

I think the key here is to recognize that the bill covers a period that extends beyond the accounting period. So we'll need to accrue only the portion of the bill that relates to the April 30 accounts. My strategy would be to calculate the daily rate and then prorate it for the number of days in the accounting period.

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Dorthy

8 months ago

I'm a bit confused here. Should we be accruing the full $960 bill, or just a portion of it? The question mentions that the bills are usually similar amounts, so I'm not sure if we need to prorate it.

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Ines

8 months ago

Okay, let's think this through step-by-step. The bill covers the period from December 1 to February 28, and the accounting period ends on April 30. So we need to figure out how much of that bill should be accrued for the April 30 accounts.

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Susy

8 months ago

Hmm, this looks like a tricky one. I'll need to carefully consider the timing of the bill and the accounting period to determine the appropriate journal entry.

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Willodean

8 months ago

I've got a good feeling about this one. Checking the dates and making sure the journals are posted should do the trick. Gotta be thorough, but I think we can nail this.

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