ACCA F3 Prepayment and accrual 4

Diesel fue in inventory at November 2014 was $18,760, and there were invoices awaited for $5,040.

During the year to 31 October 2015, diesel fuel bills of $49,380 were paid, and a delivery worth $4,032 had yet to be invoiced. At 31 October 2015, the inventory of diesel fuel was valued at $22,512.

What is the value of diesel fuel to be charged to the statement of profit or loss and other comprehensive income for the year to 31 October 2015?

Suggested solutions

Diesel Inventory Account

Debit Credit
Opening Balance 18,760
Adjustment 3,752
Closing Balance 22,512

Payable (Accrual) Account

Debit Credit
Opening Balance 5,040
Adjustment 1,008
Closing Balance 4,032

Diesel Fuel Expense Account

Debit Credit
Cash Paid 49,380
Adjustment Diesel account 3,752
Adjustment Accrual account 1,008
Total Heating Oil expenses 44,620

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