PREPAID EXPENSES:

PREPAID EXPENSES ARE NOT EXPENSES. THEY REPRESENT RIGHTS. THEREFORE, THEY ARE
ASSETS

FOREXAMPLE, PREPAID RENT EXPENSE REPRESENTS THE RIGHT OF USING A RENTED

PROPERTY OVER AN AGREED PERIOD.

PREPAID INSURANCE EXPENSE REPRESENTS THE RIGHT OF BEING INSURED OVER AN

AGREED TERM.

THE EXPIRED/USED PORTION OF PREPAID EXPENSES BECOME ACTUAL EXPENSE (İ.E. RENT
EXPENSE; INSURANCE EXPENSE)
EXAMPLE:

1) ATS CPA PAID 1.500 TL TO XYZ COMPANY FOR RENT EXPENSE OF IT’S
ADMINISTRATIVE OFFICE AT THE END OF FEBRUARY 2016 (THE FACILITY HAS BEEN
USED):
2) ON MARCH 1, 2016 ATS CPA RENTED AN OFFICE FROM XYZ COMPANY FOR
MARKETING DEPARTMENT FOR ONE YEAR AND PAID ONE YEAR’S FULL RENT OF
12.000 TL IN ADVANCE.
3) AT THE END OF THE YEAR- DECEMBER 31 2016 (PERIODIZATION PRINCIBLE)

FOR ATS COMPANY

102. BANKS

XXXXXXXXX 1.500 (1)

12.000 (2)

770. GAE

(1) 1.500

180. PREPAID EXPENSES

(2) 12.000 10.000(3)

760. MS&DE

(3)10.000
 1)────────── \ ────────────────

770.GAE 1.500

102.BANKS 1.500

───────── -----\──────────────

2)────────── \ ────────────────

180.PREPAID EXPENSES 12.000

102.BANKS 12.000

───────── -----\──────────────

3)────────── \ ────────────────

760.MS&DE 10.000

180.PREPAID EXPENSE 10.000

───────── -----\──────────────

FOR XYZ COMPANY

1) ATS CPA PAID 1.500 TL TO XYZ COMPANY FOR RENT EXPENSE OF IT’S
ADMINISTRATIVE OFFICE AT THE END OF FEBRUARY 2016 (THE FACILITY HAS BEEN
USED):
2) ON MARCH 1, 2016 ATS CPA RENTED AN OFFICE FROM XYZ COMPANY FOR
MARKETING DEPARTMENT FOR ONE YEAR AND PAID ONE YEAR’S FULL RENT OF
12.000 TL IN ADVANCE.
3) AT THE END OF THE YEAR- DECEMBER 31 2016 (PERIODIZATION PRINCIBLE)
 102. BANKS

(1) 1.500

(2) 12.000

649.GAINS FROM OOA

1.500 (1)

10.000 (3)

380.SHORT TERM DEFERRED INCOME

(3) 10.000 12.000(2)

1)────────── \ ────────────────

102.BANKS 1.500

649.GAINS FROM OOA 1.500

───────── -----\──────────────

2)────────── \ ────────────────

102.BANKS 12.000

380.S.T. DEFERRED INCOME 12.000

───────── -----\──────────────

3)────────── \ ────────────────

380.ST. DEFRRED INCOME 10.000

649.GAIN FROM OOA 10.000

───────── -----\──────────────
UNEARNED REVENUES:

UNEARNED REVENUES ARE NOT REVENUES. THEY REPRESENT THE CASH RECEIVED FOR AN
UNFINISHED JOB, THEREFORE, CLASSIFIED AS LIABILITY. THE EARNED PORTION OF
UNEARNED REVENUES BECOME REVENUES.

EXAMPLE1:

1) ATS CPA COMPLETED A TAX SERVICE FOR ONE OF ITS CLIENTS AND RECEIVED 500
TL.
2) ON APRIL 30, 2022, ATS CPA RECEIVED 12.000 TL FOR A BOOKKEEPING SERVICE
THAT WILL LAST 12 MONTHS
3) RECORD FOR DECEMBER 31 2022

102.BANKS

(1) 500
(2) 12.000

380.SHORT TERM DEFERRED INCOME

3) 8.000 12.000 (2)

600.SALES REVENUE

500 (1)

8.000 (3)

1)────────── \ ────────────────

102.BANKS 500

600.SALES REVENUE 500

───────── -----\──────────────

2)────────── \ ────────────────

102.BANKS 12.000

380.SHORT TERM DEFERRED INC. 12.000

 ───────── -----\──────────────

3)────────── \ ────────────────

380.SHORT TERM DEFERRED INC. 8.000

600. SALES REVENUE 8.000

───────── -----\──────────────

EXAMPLE 2:

1. ON MARCH 31 2022, XYZ COMPANY RENTED AN EMPTY WAREHOUSE OF

ATS COMPANY FOR ONE YEAR AND PAID 24.000 TL IN ADVANCE.
2. AT THE END OF THE YEAR

FOR XYZ COMPANY

102.BANKS

XXXXXXXXXXXX 24.000 (1)

180.PREPAID EXPENSES

(1) 24.000 18.000 (2)

760.MS&DE

(2) 18.000

1)────────── \ ────────────────

180.PREPAID EXPENSE 24.000

102. BANKS 24.000

───────── -----\──────────────
2)────────── \ ────────────────

760.MS&DE 18.000

180.PREPAID EXPENSES 18.000

───────── -----\──────────────

FOR ATS COMPANY

102.BANKS

(1) 24.000

380.SHORT TERM DEFERRED INCOME

(2) 18.000 24.000 (1)

649.GAINS FROM OOA

18.000 (2)

1)────────── \ ────────────────

102.BANKS 24.000

380.SHORT TERM DEFERRED 24.000

───────── -----\──────────────
 2)────────── \ ────────────────

380.S.T DEFERRED INCONE 18.000

649. GAINS FROM OOA 18.000

───────── -----\──────────────

ACCRUED REVENUES AND ACCRUED EXPENSES (ACCRUAL PRINCIPLE) :

ACCRUED REVENUES ARE REVENUES THAT BELONGS THE CURRENT PERIOD BUT WILL BE
RECEIVED IN THE NEXT PERIOD.

ACCRUED EXPENSES ARE EXPENSES THAT BELONG THE CURRENT PERIOD BUT WILL BE
PAID IN THE NEXT PERIOD.

EXAMPLE 1:

1. ATS COMPANY DEPOSITED 100.000 TL ON A TIME DEPOSIT ACCOUNT TO BANK A

FOR ONE YEAR WITH AN ANNUAL INTEREST RATE OF 12% ON MARCH 31, 2023
2. AT THE END OF THE YEAR ON DEC 31, 2023
3. OM MARCH 31, 2024

HINT: 102.01.BANKS – SAVINGS ACCOUNT

102.02.BANKS – TIME DEPOSIT ACCOUNT

FOR ATS COMPANY

INTEREST REVENUE IN 2023 = CAPITAL * INTERST RATE * TIME PASSED / 1 YEAR

100.000 * 12% * 9 MONTHS / 12 MONTHS = 9.000 TL

102.02.BANKS
 (1) 100.000

102.01.BANKS

XXXXXXX 100.000 (1)

ON DECEMBER 31, 2023

INTEREST REVENUE OF 2023 = 100.000 * 0,12 * 9 MONTHS / 12 MONTHS = 9.000 TL

181.INCOME ACCRUALS

(2) 9.000

642.INTEREST REVENUE -2023

(3) 9.000 9.000 (2)

690.P/L OF THE PERIOD -2023

9.000 (3)

INTEREST REVENUE OF THE YEAR 2023 IS CLOSED AND TAXED IN 2023. HOWEVER 181.
ACCRUED INCOME WILL REMAIN OPEN UNTIL MARCH 31 2024.

ON MARCH 31, 2024

INTEREST REVENUE OF 2024 = 100.000 * 0,12 * 3 MONTHS / 12 MONTHS = 3.000 TL

 102.01BANKS

(4) 112.000

181.INCOME ACCRUALS

(2) 9.000 9.000 (4)

642.INTEREST REVENUE - 2024

3.000 (4)

102.02.BANKS

(1) 100.000 100.000 (4)

AND ON DECEMBER 31 2024

642.INTEREST REVENUE -2024

(5) 3.000 3.000 (4)

690.P/L OF THE PERIOD - 2024

3.000 (5)

# ACCOUNTS DEBIT CREDIT

1) 102.02.BANKS 100.000
 102.01.BANKS 100.000

2) 181.INCOME ACCRUALS 9.000

642.INTEREST REVENUE - 2023 9.000

3) 642.INTEREST REVENUE - 2023 9.000

690.P/L OF THE PERIOD -2023 9.000

THE YEAR 2023 IS CLOSED

4) 102.01.BANKS 112.000

102.02.BANKS 100.000

181.INCOME ACCRUALS 9.000

642.INTEREST REVENUE -2024 3.000

5) 642.INTEREST REVENUE - 2024 3.000

690.P/L OF THE PERIOD-2024 3.000

THE YEAR 2024 IS CLOSED

EXAMPLE 2:

1) ON MARCH 31, 2023 ATS COMPANY BORROWED 500.000 TL FROM BANK A FOR 12
MONTHS WITH AN ANNUAL INTEREST RATE OF 24%
2) ON DECEMBER 31, 2023
3) ON MARCH 31 2024

INTEREST EXPENSE IN 2023 = 500.000 * 24% * 9 MONTHS / 12 MONTHS = 90.000 TL

FOR ATS COMPANY

102.BANKS

(1) 500.000
 300.BANK CREDITS

XXXXXXX 500.000 (1)

ON DECEMBER 31, 2023

INTEREST EXPENSE OF 2023 = 500.000 * 0,24 * 9 MONTHS / 12 MONTHS = 90.000 TL

780.FINANCING EXPENSES

(2) 90.000

381.EXPENSE ACCRUALS

90.000 (2)

AND

780.FINANCING EXPENSES -2023

(2) 90.000 90.000 (3)

690.P/L OF THE PERIOD - 2023

(3) 90.000

FINANCING EXPENSE OF THE YEAR 2023 IS CLOSED AND DEDUCTED FROM TAXABLE
INCOME IN YEAR 2023. HOWEVER 381. EXPENSE ACCRUALS ACCOUNT WILL REMAIN OPEN
UNTIL MARCH 31 2024.

ON MARCH 31, 2024

INTEREST EXPENSE OF 2024 = 500.000 * 0,24 * 3 MONTHS / 12 MONTHS = 30.000 TL

 102.BANKS

XXXXXXXXXX 620.000 (4)

381.EXPENSE ACCRUALS

(4) 90.000 90.000 (2)

780.FINANCING EXPENSE -2024

(4) 30.000

300.BANK CREDIT

(5) 500.000 500.000 (1)

INTEREST EXPENSE OF 2024 = 500.000 * 0,24 * 3 MONTHS / 12 MONTHS = 30.000 TL

AND ON DECEMBER 31 2024

780.FINANCING EXPENSES -2024

(4) 90.000 90.000 (5)

690.P/L OF THE PERIOD -2024

(5) 90.000
 # ACCOUNTS DEBIT CREDIT

1) 102.BANKS 500.000

300.BANK CREDITS 500.000

2) 780.FINANCING EXPENSES -2023 90.000

381.EXPENSE ACCRUALS 90.000

3) 690.P/L OF THE PERIOD-2023 90.000

780.FINANCING EXPENSES - 2023 90.000

THE YEAR 2023 IS CLOSED

4) 300.BANK CREDITS 500.000

381.EXPENSE ACCRUAL 90.000

780.FINANCING EXPENSES - 2024 30.000

102.BANKS 620.000

5) 690.P/L OF THE PERIOD -2024 30.000

780.FINANCING EXPENSES - 2024 30.000

THE YEAR 2024 IS CLOSED

EXERCISE 1:

1. ON MAY 1, 2016 ATS CPA RENTED AN OFFICE FROM XYZ COMPANY FOR
MARKETING DEPARTMENT FOR ONE YEAR AND PAID ONE YEAR’S FULL RENT OF
36.000 TL IN ADVANCE.
 2. AT THE END OF THE YEAR

FOR ATS COMPANY

# ACCOUNT DEBIT CREDIT

1) 180.PREPAID EXPENSE 36.000

102.BANKS 36.000

2) 760.MS&DE 24.000

180.PREPAID EXPENSES 24.000

FOR XYZ COMPANY

# ACCOUNT DEBIT CREDIT

1) 102.BANKS 36.000

380.ST.DEFERRED INCOME 36.000

2) 380.ST.DEFERRED INCOME 24.000

649.GAINS FROM OOA 24.000

EXERCISE 2:

1. ON MAY 1 2022, XYZ COMPANY RENTED AN EMPTY WAREHOUSE OF ATS

COMPANY FOR ONE YEAR AND PAID 120.000 TL IN ADVANCE ON
2. AT THE END OF THE YEAR
 FOR XYZ COMPANY

FOR ATS COMPANY

EXAMPLE 1:
 1. ATS COMPANY DEPOSITED 250.000 TL ON A TIME DEPOSIT ACCOUNT TO BANK
A FOR ONE YEAR WITH AN ANNUAL INTEREST RATE OF 24% ON SEPTEMBER 30,
2023
2. AT THE END OF THE YEAR - ON DEC 31, 2023
3. ON SEPTEMBER 30, 2024

HINT: 102.01.BANKS – SAVINGS ACCOUNT

102.02.BANKS – TIME DEPOSIT ACCOUNT

FOR ATS COMPANY

INTEREST REVENUE IN YEAR 2023 = 250.000 * 0,24 * 3 MONTHS /12 NOTHS = 15.000

# ACCOUNTS DEBIT CREDIT

1) 102.02.BANKS 250.000

102.01.BANKS 250.000

2) 181.INCOME ACCRUAL 15.000

642.INTEREST REVENUE -2023 15.000

3) 642.INTEREST REVENUE - 2023 15.000

690.P/L OF THE PERIOD - 2023 15.000

4) 102.01.BANKS 310.000

102.02.BANKS 250.000

181. INCOME ACCRUALS 15.000

642.INTEREST REVENUE - 2024 45.000

5) 642.INTEREST REVENUE – 2024 45.000

690.P/L OF THE PERIOD - 2024 45.000

EXERCISE 1:

1. ON AUGUST 30, 2023 ATS COMPANY BORROWED 500.000 TL FROM BANK A

FOR 12 MONTHS WITH AN ANNUAL INTEREST RATE OF 24%
2. ON DECEMBER 31, 2023
3. ON AUGUST 30 2024

INTEREST EXPENSE IN 2023 = 500.000 * 0,24 * 4 MONTHS / 12 MONTHS = 40.000

INTEREST EXPENSE IN 2024 = 500.000 * 0,24 * 8 MONTHS * /12 MONTHS = 80.000

FOR ATS COMPANY

# ACCOUNT DEBIT CREDIT

1) 102.BANKS 500.000

300.BANK CREDIT 500.000

2) 780.FINANCING EXPENSES 40.000

381.EXPENSE ACCRUALS 40.000

3) 300.BANKS CREDITS 500.000

381.EXPENSE ACCRUALS 40.000

780.FINANCING EXPENSE 80.000

102.BANKS 620.000

EXERCISE 2:
 1. DERİN&ÇETİN COMPANY DEPOSITED 750.000 TL TO A TIME DEPOSIT ACCOUNT FOR
12 MONTHS WITH ANNUAL INTEREST OF 40% ON MARCH 31, 2023.
2. RECORD RELATED TRANSACTION ON DECEMBER 31, 2023
3. RECORD RELATED TRANSACTION ON MARCH 31, 2024

INTEREST REVENUE IN 2023 = 750.000 * 0,40 * 9 MONTHS / 12 MONTHS = 225.000

INTEREST REVEUE IN 2024 = 750.000 * 0,40 * 3MONTHS / 12 MONTHS = 75.000

# ACCOUNT DEBIT CREDIT

1) 102.BANKS 750.000

100.CASH 750.000

2) 181.INCOME ACCRUALS 225.000

642.INTEREST REVENUE 225.000

3) 102.BANKS 300.000

181.INCOME ACCRUALS 225.000

642.INTEREST REVENUE 75.000

VALUE ADDED TAX – VAT

EXAMPLE 1:

HINT: VAT IS 18%

1. COMPANY KÜBRA PURCHASED 100.000 TL WORTH INVENTORY FROM COMPANY

ADA AND PAID VIA BANK.

153.MERCH. INV.

(1) 100.000

191.VAT DEDUCTABLE

(1) 18.000

102. BANK

XXXXXXXXX 118.000 (1)

2. COMPANY KÜBRA SOLD ALL OF THIS INVENTORY FOR 130.000 TL

 102. BANK

XXXXXXXXX 118.000 (1)

(2)153.400

600.D0MESTIC SALES

130.000 (2)

391.VAT CALCULATED

23.400 (2)

153.MERCH. INV.

(1) 100.000 100.000(2’)

621.COGS

(2’)100.000

191.VAT DEDUCTED

(1) 18.000

THEN,

391.VAT CALCULATED
 (3) 23.400 23.400 (2)

191.VAT DEDUCTED

(1) 18.000 18.000 (3)

360.TAXES&FUNDS PAYABLE

5.400 (3)

# ACCOUNTS DEBIT CREDIT

1) 153. MERCHANDISE INVENTORY 100.000

191.VAT DEDUCTABLE 18.000

100.BANKS 118.000

2) 102.BANKS 153.400

600.DOMESTIC SALES 130.000

391.VAT CALCULATED 23.400

2’) 621.COGS 100.000

153.MERCHANDISE INVENTORY 100.000

3) 391.VAT CALCULATED 23.400

191.VAT DEDUCTABLE 18.000

360.TAXES&FUNDS PAYABLE 5.400

EXAMPLE 2:

HINT: VAT IS 18%

1. COMPANY KÜBRA PURCHASED 200.000 TL WORTH INVENTORY FROM ADA PAID

VIA BANK.

102. BANK

XXXXXXXXX 236.000 (1)

153.MERCH. INV.

(1) 200.000

191.VAT DEDUCTABLE

(1) 36.000

2. COMPANY SOLD HALF OF THIS INVENTORY FOR 120.000 TL

102. BANK

XXXXXXXXX 236.000 (1)

(2) 141.600

600.D0MESTIC SALES

120.000 (2)

391.VAT CALCULATED

21.600 (2)
 153.MERCH. INV.

(1) 200.000 100.000 (2’)

621.COGS

(2’) 100.000

191.VAT DEDUCTED

(1) 36.000

THEN,

391.VAT CALCULATED

(3) 21.600 21.600 (2)

191.VAT DEDUCTED

(1) 36.000 36.000 (3)

190. VAT DEFERRED

(3) 14.400
 # ACCOUNTS DEBIT CREDIT

1) 153. MERCHANDISE INVENTORY 200.000

191.VAT DEDUCTABLE 36.000

100.BANKS 236.000

2) 102.BANKS 141.600

600.DOMESTIC SALES 120.000

391.VAT CALCULATED 21.600

2’) 621.COGS 100.000

153.MERCHANDISE INVENTORY 100.000

3) 391.VAT CALCULATED 21.600

190.VAT DEDUCTABLE 14.400

191.VAT DEDUCTABLE 36.000

EXERCISE 1:
 (1) ADA COMPANY PURCHASED 500.000 TL WORTH INVENTORY ON ACCOUNT.
(2) ADA COMPANY SOLD 400.000 TL WORTH INVENTORY FOR 600.000 TL ON A NOTE.

# ACCOUNTS DEBIT CREDIT

1) 153.MERCHANDISE INVENTORY 500.000

191.VAT DEDUCTABLE 90.000

320.ACCOUNT PAYABLE 590.000

2) 121.NOTE RECEIVABLE 708.000

600.DOMESTIC SALES 600.000

391.VAT CALCULATED 108.000

2’) 621.COGS 400.000

153.MERCHANDISE INVENTORY 400.000

3) 391.VAT CALCULATED 108.000

191.VAT DEDUCTABLE 90.000

360.TAXES&FUNDS PAYABLE 18.000

EXERCISE 2:
 (1) KÜBRA LTD. COMPANY PURCHASED 800.000 TL WORTH INVENTORY ON A NOTE.
(2) KÜBRA LTD. COMPANY SOLD 200.000 TL WORTH INVENTORY FOR 350.000 TL ON
ACCOUNT.

# ACCOUNTS DEBIT CREDIT

1) 153.MERCHANDISE INVENTORY 800.000

191.VAT DEDUCTABLE 144.000

321.NOTE PAYABLE 944.000

2) 121.ACCOUNT RECEIVABLE 413.000

600.DOMESTIC SALES 350.000

391.VAT CALCULATED 63.000

2’) 621.COGS 200.000

153.MERCHANDISE INVENTORY 200.000

3) 391.VAT CALCULATED 63.000

190.VAT DEFERRED 81.000

191.VAT DEDUCTABLE 144.000