Accruals and Prepayments
Preparing Account for Expenses (with accruals and Prepayments
Expenses Prepaid and Accrued
For all expenses that have information relating to prepayments and accruals at the start and at the end of the period,
you must prepare the account for that expense. This is to determine the amount for those expenses that applies to
the current period.
Remember:
1.
2.
Expenses prepaid are assets and will therefore have debit balances
Expenses accrued are liabilities and will therefore have credit balances
Prepayment b/f
Cash/Bank
Prepayment b/d
Cash/Bank
Owings c/d
Prepayment b/f
Cash/Bank
Owing c/d
Prepayment b/d
Expense Account
XX
Profit and Loss (Balancing figure)
XX
Prepayment c/d
XX
XX
Expense Account
XX
Owings b/f
XX
Profit and Loss (Balancing figure)
XX
Owings b/d
XX
XX
XX
XX
XX
Expense Account
Owings b/f
Profit and Loss (Balancing figure)
Prepayment c/d
Owings b/d
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX