Accruals and Prepayments Flashcards
How do you reverse a balance brought forward of a prepayment?
Credit prepayment
Where do the rental invoices paid in a year go on the T account?
Debit
Where does the closing prepayment go on the T account?
Debit
How would a prepayment be recorded at the year end?
Debit prepayments
Credit expense account
Are accrued expenses a debit or a credit in the trial balance?
Credit
Are prepaid expenses a debit or credit in the trial balance?
Debit
Is accrued income a debit or a credit in the trial balance?
Debit
Is deferred income a credit or a debit in the trial balance?
Credit
How do you reverse a brought forward accrual?
Debit accruals, credit expense
When should adjustments for accruals and prepayments be made?
After extracting the trial balance
How is an accrual recorded at the end of the year?
Debit expense, credit accruals
Posting the journal to record accrued income will…
Increase profit, increase relevant income and increase net assets
When revenue is received but not earned, how is it recorded in the journal?
Debit sales, credit deferred income
How do you calculate the expense for the year?
Amount paid in the year, less opening accrual and closing prepayment
What are the correct journal entries to reverse a prepayment?
Debit prepayments, credit expense
