Cost Of Sales, Accruals And Prepaymenrs Flashcards
Closing inventory DE
Dr Closing inventory (BS)
Cr Closing inventory (IS)
To which account is opening inventory added?
Purchases
Gross profit
Sales revenue - COS
Delivery inwards
The amount paid by the business for having goods delivered to it
P&L COS
Delivery outwards
The amount paid by a business for delivering goods to its customers
P&L Expense
Incurred an expense but not yet paid for it at year end?
Accrual
Paid for an expense in advance?
Prepayment
Accrual DE
Dr Expense (P&L)
Cr Accruals (BS)
Prepayment DE
Dr Prepayments (BS)
Cr Expense (P&L)
Where does the accrual TB amount go?
Current liabilities (BS)
Other name for accruals ledger
Other payables
Where does the prepayment TB amount go?
Current assets (BS)
Other name for prepayments ledger
Other receivables
Income received in advance that relates to the next period
Deferred income
Deferred income DE
Dr Income (PL)
Cr Deferred income (BS)
Income earned during the period but not received yet
Accrued income
Accrued income DE
Dr Accrued income (BS)
Cr Income (PL)
Where does the accrued income TB amount go?
Current assets
Other name for accrued income ledger
Other receivables
Where does the deferred income TB amount go?
Current liabilities
What is the other name for the deferred income ledger?
Other payables
Process for year start accruals, prepayments, accrued income and deferred income
- Bring forward b/f balance
- Reverses DE
