Hi SJ,
Prepayments and accruals are pretty easy. Prepayments are an asset and accruals are a liability, so prepayments are DR and accruals are Cr.
Then to work out prepayments, say if you owe rent of 1600 per year, and you have paid 2000, this means that you are 400 prepaid. Same principle with accruals.
Sometimes you have to work these out for the months or the period of quarterly periods. Say if you owe rent of 300 per month, and at month end you have paid 500, hence 200 prepaid, so dr prepaid 200, and cr rent 200.
Accruals are only a measurement of how much that you owe. So for instance if your rent is 150 per week and since last time you paid 2 weeks have gone past, you will owe 300. cr accruals account 300, dr rent account 300. the rent account is a measurement of how much rent you owe, as well as how much rent you pay.
Hope This helps
Paula Welsh
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