Question: Oriel Ltd, whose financial year runs from 1 June to the following 31 May, maintains a combined rent and rates account in its ledger. Rent

Oriel Ltd, whose financial year runs from 1 June to the following 31 May, maintains a combined rent and rates account in its ledger.

Rent is fixed on a calendar year basis and is payable quarterly in advance. Rent was Â£2,400 for the year ended 31 December 20X2 and is Â£3,000 for the year ending 31 December 20X3.

Rates are assessed annually for the year from 1 April to the following 31 March and are payable in one lump sum by 30 September. The rates assessment was Â£2,040 for the year ended 31 March 20X3 and Â£2,280 for the year ending 31 March 20X4.
Oriel Ltd paid the rates for the year ended 31 March 20X3 by cheque on 30 September 20X2 and intends to pay the rates for the year ended 31 March 20X4 on 30 September 20X3.
Required
a. Prepare the rent and rates account for the year ended 31 May 20X3 only as it would appear in the ledger of Oriel Ltd.
b. Explain with particular reference to your answer to (a) the meaning of the term 'matching'.

Date 20X2 3 Jan 1 Apr 1 July 1 Oct 20X3 3 Jan Amount Details 600 600 600 600 Quarter to 31 Mar 20K2 Quarter fo 30 Jun 20X2 Quarter to 30 Sep 20X2 Quarter lo 31 Dec 20X2 750 750 Quarter to 31 Mar 20X3 Quarter to 30 Jun 20X3

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a Workings Rent prepaid at 1 June 20X2 1 3 x 600 200 Rent prepaid at 31 May 20X3 1 3 x 750 250 Rates ... View full answer

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