Accruals And Prepayments Cheat Sheet

ADVERTISEMENT

Accruals and Prepayments
Cheat Sheet
Expenses Accrued
Accrued opening balance (liability)
Bank
Profit and loss
Accrued closing balance
When you are putting in the accrued expenses you are adding extra expense to that year’s total so the
balance carried down will be on the debit side adding to the expense, the opening balance will be a credit.
The double entry will be:
Debit expense account - this will be shown in the adjustments column on the ETB, on the same line as the
expense entry and as a debit, which will increase the amount sent to the statement of profit or loss. The
balancing entry will be under accrued expenses, which will be a credit in the statement of financial position.
Expenses Prepaid
Prepaid opening balance (asset)
Bank
Profit and loss
Prepaid closing balance
For prepaid expenses the expense has been paid, therefore you’re taking money out the expense account,
so the balance carried down will be on the credit side, opening as a debit.
Credit expense account – this will be shown in the adjustments column on the ETB, on the same line as the
expense entry and as a credit, this will decrease the amount sent to the statement of profit or loss. The
balancing entry will be under prepaid expenses, which will be a debit in the statement of financial position.

ADVERTISEMENT

00 votes

Related Articles

Related forms

Related Categories

Parent category: Education
Go
Page of 2