WorksheetsAccruals and Prepayment
Total questions: 15
Worksheet time: 8mins
What is difference between accrued expenses and prepaid expenses? (tick 2 boxes)
accrued expenses = not yet paid for the current year
prepaid expenses = paid in advance for the next accounting period
accrued expenses = paid for the current year
prepaid expenses = not paid for next accounting year
accrued expenses = posted as current asset
prepaid expenses = posted as current liability
accrued expenses = posted as current liability
prepaid expenses = posted as current asset
What is the difference between income receivable and income received in advance? (tick 2 boxes)
income receivable = posted as current asset
income received in advance = posted as current liability
income receivable = not yet received for current year
income received in advance = received in advance for next year
income receivable = received for current year
income received in advance = not received in advance for next year
income receivable = posted as current liability
income received in advance = posted as current asset
What are 2 accounting concepts applied to prepayments and accruals?
prudence and accrual concepts
prudence and matching concepts
accounting entity and going concern concepts
matching and accrual concepts
What is prepaid expense?
Business has incurred expense, but has not paid (still owe).
Business has not incurred expense, but has paid.
What is accrued expense?
Business has incurred expense, but has not paid (still owe).
Business has not incurred expense, but has paid.
What is income received in advance?
Business has earned the income, but has not received the money.
Business has not earned the income, but has received the money.
What is income receivable?
Business has earned the income, but has not received the money.
Business has not earned the income, but has received the money.
The accrual concept states that _____ during a financial period, regardless of _______.
income and expenses are recorded when they are earned and incurred respectively, when collection is received and
payment is made.
assets and liabilities are recorded , when they occurred.
An example is utilities used in December 2018 but which has not been paid in December 2018 must be recorded in the Income Statement for the period ended 2018. This is an application of ___ concept.
Accrual
Matching
Accounting period
Objectivity
Prepaid rent is recorded as ____ in the Balance Sheet.
Current assets
Current liabilities
Commission income received in advance is recorded as ____ in the Balance Sheet.
Current assets
Current liabilities
Journal entry to adjust for Accrued utilities at year end: Dr__ & Cr__.
Dr Utilities (expense) Cr Accrued utilities (CL)
Dr Prepaid utilities (CA) Cr Accrued utilities (CL)
Dr Accrued utilities (CL) Cr Utilities (expense)
Accrued salaries is recorded as ____ in the Balance Sheet.
Current assets
Current liabilities
Accrued rent is recorded as ____ in the Balance Sheet.
Current assets
Current liabilities
Annual salaries is recorded as ____ in ____ column of Salaries Expense account
Cash at bank, +
Profit & Loss , +
Profit & Loss , -
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