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    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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