Ch 5 Accounting For Accruals, Prepayments, Capital And Revenue Receipts

Question 1

When preparing a trading and profit and loss account,

Answer 1

a business must include only items of income and expense that apply to the accounting period

Question 2

Accruals

Answer 2

Amounts due
Must be included in the accounts and are added onto the income or expense

Question 3

Prepayments

Answer 3

Paid into the next accounting period, should not be included in them years accounting period, therefore they are subtracted from the income or expense