Amy S.

asked • 08/20/17

just a simple clarifying question! Urgent!

If a trial balance on 30 April 2017 shows:
                               Debit ($)
MAINTENANCE            2800
With the additional info that:
The company is billed for maintenance services at $280 per month.
I am required to prepare an extract of the income statement and balance sheet for the year ended 30 April 2017. 
I have some simple questions I urgently need clarification for. Could I have full explanations for these simple questions asap? Thanks so much in advance! :)
1. Is it an expense? If so, is it accrued expense/prepaid expense? (As $2800 divided by $280 gives you 10 months, which means that it was either prepaid in advance for 10 months or accrued expense for 10 months) 
2. what does it mean if the maintenance part is reflected in the trial balance on 30 April? Does it mean that it was paid Already/inccured and pending payment?

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