Accruals and Prepayments

Question 1

what is the accruals or matching concept

Answer 1

expenses and income are reported for in the period to which they relate to rather than when cash was paid or received

Question 2

what to debit and credit for accruals

Answer 2

DEBIT expense account
CREDIT accrual account

Question 3

what to debit and credit for prepayments

Answer 3

DEBIT prepayment account
CREDIT expense account

Question 4

what does rent in arrears mean

Answer 4

not paid yet

Question 5

does rent pre paid for that year go on the debit or credit side of the rent expense account

Answer 5

credit

Question 6

does pre paid rent from previous year go on credit or debit side of the rent expense account

Answer 6

debit

Question 7

does heat expenses accruals from previous year go on the credit or debit side of the heat expenses account

Answer 7

credit

Question 8

does heat expenses accruals from this year (still owing at the end of year) go on the credit or debit side of the heat expenses account

Answer 8

debit

Question 9

if you are owed rent payment at the end of the year, where does this receivable go on the rental income account

Answer 9

credit side