Previous year's balances
by Mark
(Melbourne)
Q: Hi,
I have details for accounts from 2010:
Cash at bank 1100 $6,560
Accounts receivable 1200 $7,760
Prepaid Insurance 1300 $380
Now I need to make T accounts for the financial year 2011. I have a number of details as follows:
1. Tuning fees of $57,000 were receivable during the year; $47,900 of this total was received in cash. The remainder consisted of transactions on credit.
2. Revenue from piano repairs was $48700. Cash received totaled $33,500, and accounts receivable increased by $15,200.
My question is, do I put the end balance of 2010 into the 2011 T accounts, and if so where do I put them?
Thanks,
M.
A: Mark, yes you put the end balances of 2010 into the T-accounts for 2011. The closing balance (end balance) of one year is the same as the opening (beginning) balance for the next year.
Check out this lesson on Balancing T-Accounts to see where the opening balance (the same as the closing balance from the previous year) is placed in the T-Account.
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