ACCRUALS AND PREPAYMENTS OF EXPENSES AND INCOME

Expenses Account JAN FEB MAR APR MAY JUN JLY AUG SEP OCT NOV DEC
Date Details $ Date Details $
1.1.20 Balance b/d (Op Exp Prepaid) XXX 1.1.20 Balance b/d (Op Exp Accured) XXX Prepayment/ prepaid/paidin advance/received in advance
5.1.20 Cash/ Bank xxx 31.12.20 Income Statement (?) xxx Accruals/Out standing/Due/Not paid/Not received

31.12.20 Balance C/d (Closing Accured ) XXX 31.12.20 Balance C/d (Closing Prepaid) XXX ACCURED INCOME: INCOME EARNED DURING THE YEAR BUT NOT RECEIVED. CURRENT ASSET
PREPAID INCOME: INCOME RECEIVED DURING THE YEAR BUT NOT EARNED.. CURRENT LIABILITY
XXXX XXXX
1.1.21 Balance b/d (Op Prepaid) XXX 1.1.21 Balance b/d (Op Accured) XXX ACCURED EXPENSES: EXPENSES INCURRED DURING THE YEAR BUT NOT PAID. CURRENT LIABILITY
PREPAID EXPENSES : EXPENSES PAID DURING THE YEAR BUT NOT INCURRED. CURRENT ASSET
CURRENT CURRENT
ASSETS LIABILITIES

Income Account
Date Details $ Date Details $
1.1.20 Balance b/d (Op Acc Income) XXX 1.1.20 Balance b/d (Op Prepaid income) XXX
31.12.20 Income Statement (?) xxx
5.6.20 Cash/ Bank xxx
31.12.20 Balance C/d (Prep aid income) XXX 31.12.20 Balance C/d (Op Acc Income) XXX

XXXX XXXX
1.1.21 Balance b/d (Op Acc Income) XXX 1.1.21 Balance b/d (Op Prepaid income) XXX

CURRENT CURRENT
ASSETS LIABILITIES

IMPORTANT ENTRIES FOR ACCRUAL AND PREPAYMENTS FOR EXPENSES AND INCOMES.

ACCURED INCOME ACCURED EXPENSES

1 DR INCOME RECEIVABLE (BS/SFP ASSETS) 1 DR EXPENSES (INCOME STATEMENT )

CR INCOME (INCOME STATEMENT ) CR EXPENSES PAYABLE(BS/SFP LIABILITY)

2 ON THE DATE OF RECEIPT 2 ON THE DATE OF PAYMENT

DR CASH/ BANK DR EXPENSES PAYABLE

CR INCOME RECEIVABLE CR CASH/BANK

PREPAID INCOME PREPAID EXPENSES

1 DR CASH/BANK 1 DR PREPAID EXPENSES

CR PREPAID INCOME CR CASH/ BANK

2 AT THE TIME OF RECOGINISED AS INCOME 2 AT THE TIME OF MAKING PAYMENT

DR PRRPAID INCOME (BS/SFP LIABILITY) DR EXPENSES ACCOUNT (INCOME STATEMENT )

CR INCOME ACCOUNT (INCOME STATEMENT ) CR PREPAID EXPENSES ( BS/SFP ASSETS)

Q.11.1
A
Telephone Expenses Account
Date Details $ Date Details $
1.4.2017 Balance b/d (Op Exp Prepaid) 0 1.4.2017 Balance b/d (Op Exp Accured) 0
30.6.2017 Cash 44 31.3.2018 Income Statement (?) 221
4.10.2017 Bank 56
3.1.2018 Bank 62

31.3.2018 Balance C/d (Closing Accured ) 59 31.3.2018 Balance C/d (Closing Prepaid) 0

221 221
1.4.2018 Balance b/d (Op Prepaid) 0` 1.4.2018 Balance b/d (Op Accured) 59

B INCOME STATEMENT EXTRACT 31.3.2018

DR CR
Expenses
Telephone Expenses 221

C STATEMENT OF FINANCIAL POSITION EXTRACT AS AT 31.3.2018

CURRENT LIABILITIES
Others payable () telephone exp Acc 59

Q11.2
A
Insurance Expenses Account
Date Details $ Date Details $
1.4.2017 Balance b/d (Op Exp Prepaid) 0 1.4.2017 Balance b/d (Op Exp Accured) 0
31.3.2018 Income Statement (?) 450
1.7.2017 Bank 600
3.1.2018 Bank

31.3.2018 Balance C/d (Closing Accured ) 0 31.3.2018 Balance C/d (Closing Prepaid) ? 150

600 600
1.4.2018 Balance b/d (Op Prepaid) 150 1.4.2018 Balance b/d (Op Accured) 0

B INCOME STATEMENT EXTRACT 31.3.2018

DR CR
Expenses
Insurance Expenses 450

C STATEMENT OF FINANCIAL POSITION EXTRACT AS AT 31.3.2018

CURRENT ASSETS
Others receivables() telephone exp A 150 1.4.18 31.3.19 600/12=50
APR MAY JUN JLY AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN

START ENDS
3 MONTHS PREPAID
3*50=150
Q11.4

Telephone Expenses Account

Date Details $ Date Details $
1.4.2018 Balance b/d (Op Exp Prepaid) 0 1.4.2018 Balance b/d (Op Exp Accured) 59
5.4.2018 Cash 59 31.3.2019 Income Statement (?) 227
30.6.2018 Bank 60
2.10.2018 Bank 48
31.12.2018 Bank 56

31.3.2019 Balance C/d (Closing Accured ) 63 31.3.2019 Balance C/d (Closing Prepaid) 0

286 286
1.4.2019 Balance b/d (Op Prepaid) 0 1.4.2019 Balance b/d (Op Accured) 63

B INCOME STATEMENT EXTRACT 31.3.2019

DR CR
Expenses
Telephone Expenses 227

C STATEMENT OF FINANCIAL POSITION EXTRACT AS AT 31.3.2019

CURRENT LIABILITIES
Others payable () telephone exp Acc 63

Q11.5
A
Insurance Expenses Account
Date Details $ Date Details $
1.4.2018 Balance b/d (Op Exp Prepaid) 150 1.4.2018 Balance b/d (Op Exp Accured) 0
31.3.2019 Income Statement (?) 627
1.7.2018 Bank 636

31.3.2019 Balance C/d (Closing Accured ) 0 31.3.2019 Balance C/d (Closing Prepaid) ? 159

786 786
1.4.2019 Balance b/d (Op Prepaid) 159 1.4.2019 Balance b/d (Op Accured) 0 636/12=53
1.4.18 31.3.19
APR MAY JUN JLY AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN
B INCOME STATEMENT EXTRACT 31.3.2018

DR CR START ENDS
Expenses 3 MONTHS PREPAID
Insurance Expenses 627 3*53=159

C STATEMENT OF FINANCIAL POSITION EXTRACT AS AT 31.3.2018

CURRENT ASSETS
Others receivables() telephone exp A 159

Q.11.6
A
Rent and Rates Account
Date Details $ Date Details $
1.4.2018 Balance b/d (Op Exp Prepaid) Rates 300 1.4.2018 Balance b/d (Op Exp Accured) Rent 1000
1.5.2018 Bank (Rent) 4000 31.3.2019 Income Statement (?)
1.6.2018 Bank (Rates) 3900 Rent 6000
1.12.2018 Bank (Rent) 2500 Rates 3600

31.3.2019 Balance C/d (Closing Accured ) Rent 500 31.3.2019 Balance C/d (Closing Prepaid) Rates 600

11200 11200
1.4.2019 Balance b/d (Op Prepaid) 600 1.4.2019 Balance b/d (Op Accured) 500

B INCOME STATEMENT EXTRACT 31.3.2018

DR CR
Expenses
Rent 6000 4000+2500-1000+500 1.4.18 31.3.19
Rates 3600 3900+300-600 APR MAY JUN JLY AUG SEP OCT NOV DEC JAN FEB MAR
C STATEMENT OF FINANCIAL POSITION EXTRACT AS AT 31.3.2019

CURRENT ASSETS START ENDS

Others receivables(Rates Prepaid)
CURRENT LIABILITIES
Others payable (Rent Accured)
600
3900*2Monts prepaid /13 Months totally paid =600
2500*1 monts Accured/5 Months totally paid =500
500

Q11.7
Commission Receivable Account
Date Details $ Date Details $
1.4.17 Balance b/d (Op Acc Income) 0 1.4.17 Balance b/d (Op Prepaid income) 0
31.3.18 Income Statement (?) 255
1.9.17 Bank 120
31.1318 Balance C/d (Prep aid income) 0 31.3.18 Balance C/d (cl Acc Income) 135

255 255
1.4.18 Balance b/d (Op Acc Income) 135 1.4.18 Balance b/d (Op Prepaid income) 0

INCOME STATEMENT EXTRACT 31.3.2018

Dr Cr
Income
comm Rec 255

STATEMENT OF FINANCIAL POSITION EXTRACT AS AT 31.3.2018

CURRENT ASSETS
Others recei 135

Q11.7
Rent Receivable Account
Date Details $ Date Details $
1.4.17 Balance b/d (Op Acc Income) 0 1.4.17 Balance b/d (Op Prepaid income) 0
1.717 BANK 250
1.10.17 BANK 250
31.1217 BANK 250
31.3.18 Income Statement (?) 750 30.3.18 Bank 250

31.3.18 Balance C/d (Prep aid income) 250 31.3.18 Balance C/d (cl Acc Income) 0

1000 1000
1.4.18 Balance b/d (Op Acc Income) 0 1.4.18 Balance b/d (Op Prepaid income) 250

INCOME STATEMENT EXTRACT 31.3.2018

Dr Cr
Income
rent Receivable 750

STATEMENT OF FINANCIAL POSITION EXTRACT AS AT 31.3.2018

CURRENT LIABILITIES
Others payabl 250

Q11.7
Commission Receivable Account
Date Details $ Date Details $
1.4.18 Balance b/d (Op Acc Income) 135 1.4.18 Balance b/d (Op Prepaid income) 0
2.4.18 BANK 135
1.10.18 BANK 145

31.3.19 Income Statement (?) 301

31.3.19 Balance C/d (Prep aid income) 0 31.3.19 Balance C/d (cl Acc Income) 156

436 436
1.4.19 Balance b/d (Op Acc Income) 156 1.4.18 Balance b/d (Op Prepaid income) 0

INCOME STATEMENT EXTRACT 31.3.2018

Dr Cr
Income
commission Receivable 301

STATEMENT OF FINANCIAL POSITION EXTRACT AS AT 31.3.2018

CURRENT ASSETS
Others recei 156

Q1. WN
Expenses Account
Date Details $ Date Details $
1.1.20 Balance b/d (Op Exp Prepaid) 0 1.11.16 Balance b/d (Op Exp Accured) 40
31.10.17 Cash/ Bank 530 31.12.20 Income Statement (?) 310

31.12.20 Balance C/d (Closing Accured ) 0 31.12.20 Balance C/d (Closing Prepaid) 180

530 530
1.1.21 Balance b/d (Op Prepaid) 180 1.1.21 Balance b/d (Op Accured) 0

Q1 ANSWER = C 270 *4/6=180

Q2. WN
stationery account

Bank 395 Drawings 15

I/S 206
Cl balance 174

395 395

Q2 ANSWER = A

Q3. WN 1800 *3/12=450 Prepaid Insurance

Q3 ANSWER = A

1350*6=8100
1380*6=8280

1380*6=8280

5400/12=450: 2 months O/S

3600/450= 8 months

4050/450= 9 MONTHS

Annual rent for one year

1350/450= 3 months prepaid

Rent Payable Account

Date Details $ Date Details $
6000/12=500 1-Feb-18 Balance b/d (Op Exp Prepaid) 1000 1-Feb-18 Balance b/d (Op Exp Accured)
500*2=1000 31-Jan-19 Income Statement (?) 6000
30.4.18 Bank 500*6 3000
31.10.18 Bank 500*7 3500

31-Jan-19 Balance C/d (Closing Accured ) 31-Jan-19 Balance C/d (Closing Prepaid) ? 1500

7500 7500
Balance b/d (Op Prepaid) 1500 Balance b/d (Op Accured)

Rent Receivable Account

Date Details $ Date Details $
1-Feb-18 Balance b/d (Op Acc Income) 600 1-Feb-18 Balance b/d (Op Prepaid income)
31.3.18 cash 800
1.5.18 BANK 2000
BANK
31-Jan-19 Income Statement (?) 2400 Bank

31-Jan-19 Balance C/d (Prep aid income) 31-Jan-19 Balance C/d (cl Acc Income) 200

3000 3000
Balance b/d (Op Acc Income) 200 Balance b/d (Op Prepaid income)
 Exam Style Questions 15.12.20
Answers
1Q B 5200-20%
5200-1040=4160

2.Q (A)
i 529 49*11.50= 529

ii TRADE
iii 105.8 529*20%=105.8
iv 423.2 529-105.8=423.20

(B) AB jones

(C) Because of any one of the following reasons credit note is issued faulty goods, damaged goods, goods not as orde

(d) Debit note

(e) DR SALES RETURN

CR TOM BROWN

3. Q C 350 +420+170-92-350= 498

4. Q B Debit note

5. Q (a) Statement of account

(b) 1.summary of transactions for the month

2. reminds Dinesh of the amount due at the end of the month
3. enables Dinesh to check his records against those of Trade Supplies.

(c) $1 010

(d) 4th October: Invoice

(e) 11th October: Credit note

(f) 2% Total amount = 931+19= 950

Therefore discount= 19/950*100=2%
aged goods, goods not as ordered, overcharge.
22/m/j/2019
 Shen Rates account
DATE DETAILS $ DATE DETAILS $
 Commission Receivable account
DATE DETAILS $ DATE DETAILS $