Академический Документы
Профессиональный Документы
Культура Документы
AND PREPARATION OF
FINAL ACCOUNTS-ACCRUAL
AND PREPAYMENTS
Adjusting entries
Adjusting entries are general journal
Continued
Types of adjusting entries
Adjusting entries
Expenses
Accrued
Revenues
Prepaid
Accrued
Prepaid
Accrued expenses
These are expenses that have been incurred but
ILLUSTRATION 1- ACCRUED
EXPENSES
In the financial year ending 31/12/2015,
total salaries and wages should be at
RM30,000. But according to the salaries
and wages account, it shows that only
RM20,000 have been paid.
Prepaid expenses
Expenses which have been paid for in advance
ILLUSTRATION 2- PREPAID
EXPENSES
On 31/12/15, the amount of rent of AAN
Enterprises trial balance was RM20,000. Out of
this, RM300 was rent paid in advance.
Accrued revenue
These are revenues which has been earned but
ILLUSTRATION 3- Accrued
Revenue
On 31/12/15, the commission earned by the
business but not yet received amounted to RM
5,000.
Prepaid revenue
Revenue which has been received in advance
ILLUSTRATION 4- Prepaid
Revenue
Alya received 12 months rent revenue for RM12,000
starting from 1 March 2015 for accounting period
ended 31/12/15
Answer:
Only 10 months rent should be received/earned for
the year ended 2015, another 2 months is prepaid
rent revenue.