Accruals, bad debts, depriciation.

Accruals and Prepayments What are accruals? Accruals are those amounts of money which supposed to be paying(a) by a certain period and are non only paid. Accruals are notes that do not enter in the run equalizer. Accruals are placed on the credit human nervus of the balance sheet under the current liabilities in the report card of expenses and on the debit stead of the profit and loss, (if expense). For Ex well(p): Assume that wet and electrical energy is paid at the cobblers last of every troika months. The touchstone was not paid on time. Details were Amount piss & international ampere; Electricity bill duebill paid LM 375thirty-first March 200231st March 2002 LM 40030th June 2002second July 2002 LM 35030th kinsfolk 20024th October 2002 LM 40031st December 20025th January 2003 The water and electrical energy level appeared as: Water & Electricity 2002 31st MarBank375 2nd JulyBank400 4th OctBank350 water and electrical energy paid on 5 January 2 003 will appear in the books of the year 2003 as snap off of the double entry. The gist amount of water and electricity was of LM 1,525, which is needed to be transferred to the profit and loss account. But LM 1,525 was put on the credit side of the water and electricity account we would concord LM 1,525 on the credit side of the account and simply LM 1,125 on the debit side.

To straighten out the account balance the LM 400 water and electricity owing for 2002 tho paid 2003, must be carried low to 2003 as a credit balance it is a obligation on 31st December 2002. instead of water and electricity owing, this is called accrued or accrual. The completed account can be shown: Water & Electricity 20022002 31 MarBank375 ! 31 DecProfit & Loss 1,525 2 JulyBank400 4 OctBank350 31DecAccrued C/d400 15251,525 2003 1st JanAccrued b/d 400 Pre-Paid... If you desire to get a full essay, order it on our website: OrderEssay.net

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