Step 10 - Dealing with adjustments - More Accruals & Prepayments

Step 10 - Dealing with adjustments - More Accruals & Prepayments

RULES for ACCRUED AND PREPAYMENT

RULES

1. Expense (dr) add(+) with Accruals (Expenses occurred but unpaid)

2. Double Entry - Add expense & Liability (unpaid)

3. Expense (dr) minus(-) with prepayment (expense not yet occurred)

4. Double Entry - Minus expense & Asset (Pay in advance)

5. Revenue (dr) minus(-) with Prepayment/unearned (revenue not yet occurred)

6. Double Entry - Minus revenue & Liability (received in advance)

7. Revenue (dr) add(+) with Accrual (Revenue occurred but unreceived)

8. Double Entry - Add revenue & Asset (unpaid revenue)

No	Items/ (SOFP CA - Current Asset CL - Current Liability	Trial Balance (Dr)	Trial Balance (Cr)	Accruals (SOFP)	Pre Payments (SOFP)	Total (SOPL)
1	Water and electricity (Accured Water and electricity CL)	3,600		650		4,250
2	Salaries to workers (Accured Salaries to workers - CL)	20,900		1,900		22,800
3	Insurance expenses (Accured Insurance expenses - CL)	3,850		350		4,200