ADJUSTMENTS FOR ACCRUALS

& PREPAYMENT
S

i. Prepaid
Expenses

ii. Ac c rued
Expenses

iii. Prepaid Revenue

iv. Ac c rued
Revenue
Summary for Accruals &
Prepayments (SOFP)

Expense Revenue
s (received
(paid) )
Prepaid Prepaid expense Prepaid revenue
(in advance)
-Paid in advance -received in
CURRENT ASSET advance
CURRENT
LIABILITY
Accrued Accrued expense Accrued Revenue
(not
yet) -not yet paid -not yet received
CURRENT LIABILITY CURRENT ASSET
Summary for Accruals &
Prepayments (SOPL)

Observe the PERIOD!!!

1. Accounting Period (must be 12 months)
2. Expenses paid period or Revenue received
Period

🞑 Either Revenue or Expenses

🞑 Amount c overed in 12 months ac c ounting

period
 2 SITUATIONS
OF
ACCRUALS &
PEPAYMENTS

There is situation
The amount of that need
prepaid & student’s
a cc rued have judgement to
been given decide on
directly in prepayment or
question accruals

Dec 2019 : Dec 2019:

Additional Info Additional Info
No 8 No 2
Adjustment for Ac c ruals &
Prepayment (tips)
Amount stated in Trial Balance are:-
1. Expenses paid
2. Revenue Received

SoFP
**Take the SoPL
prepaid/accrued ** Prepaid (- from TB figure)
amount **Accrued (+ from TB figure)
(CA/CL)
Spec ial
1.
C ase:
Investment/ Fixed Deposit
(FD)
Interest on
Investment / investment/F
FD D
or Dividend
from
investment/FD
Non Current
Revenue
Asset

Example:
1. Dec 2019, Additional info no
5
Spec ial
C ase:
2. Loan from
Bank

Loan from Interest on

Bank loan

Non Current
Expense
Liability

Example:
1. Dec 2019, Additional info no
4
Exercise
:
🞑 De c 2018 - additional info no
7,2

🞑 June 2019 -additional info no 2

🞑 De c 2019 – additional info no 8,

4