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About 4.1accruals Prepayments Lecture Notes Student Versio4n
This document discusses accruals and prepayments and their effect on financial statements. It defines an accrued expense as an expense incurred but not yet paid, and a prepaid expense as an expense paid in advance but not yet incurred. Prepaid income is income received in advance that relates to the next accounting period. Accruals increase expenses and prepayments reduce expenses in the financial statements, while prepaid income reduces reported income. The document provides examples of how accruals and prepayments affect profit and net assets, and asks questions to test understanding of accounting for rent received in advance or in arrears.
Detailed Information
| Author: | ['Darshna Kumari'] |
|---|---|
| Publication Year: | 2019 |
| Pages: | 6 |
| Language: | English |
| Format: | |
| Price: | FREE |
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