Other Payables And Other Receivables
Overzicht
A business pays its bills on its own timetable, not the calendar's. The electricity bill arrives after the power has been used; a year's insurance is paid in one lump up front. So when the financial year ends, some expenses have been used but not yet paid, and some have been paid but not yet used. The same happens with income. If we simply counted the cash that changed hands, the profit would be wrong. Other payables and other receivables are the year-end adjustments that fix this, so each year is charged only with what truly belongs to it.
In this lesson you will apply the matching (accruals) concept to both expenses and income. You will learn to handle accrued expenses, prepaid expenses, accrued income and income received in advance, write up the ledger accounts that carry the balances forward, and place each balance correctly as a current asset or current liability. These adjustments are among the most reliable marks in the exam once the method clicks.
Doelstellingen
- the importance of matching costs and revenues.
- how to apply the matching / accruals concepts by using accruals and pre-payments.
- how to prepare journal entries and ledger accounts to record accrued and prepaid expenses.
- how to prepare journal entries and ledger accounts to record accrued and prepaid incomes.
Lesnotitie
Beschikbaar in de Green Bridge-app
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Lesevaluatie
Gefeliciteerd met het voltooien van de les op Other Payables And Other Receivables. Nu je de sleutelconcepten en ideeën, het is tijd om uw kennis op de proef te stellen. Deze sectie biedt een verscheidenheid aan oefeningen vragen die bedoeld zijn om uw begrip te vergroten en u te helpen uw begrip van de stof te peilen.
Je zult een mix van vraagtypen tegenkomen, waaronder meerkeuzevragen, korte antwoordvragen en essayvragen. Elke vraag is zorgvuldig samengesteld om verschillende aspecten van je kennis en kritisch denkvermogen te beoordelen.
Gebruik dit evaluatiegedeelte als een kans om je begrip van het onderwerp te versterken en om gebieden te identificeren waar je mogelijk extra studie nodig hebt. Laat je niet ontmoedigen door eventuele uitdagingen die je tegenkomt; beschouw ze in plaats daarvan als kansen voor groei en verbetering.
- How is an accrued expense shown in the statement of financial position? A. As a current asset B. As a current liability C. As a non-current asset D. It is not shown Answer: B
- A business paid $2 000 for rent during the year. At the year-end $300 of rent was still owing. What is the rent charged to the income statement? A. $1 700 B. $2 000 C. $2 300 D. $300 Answer: C
- A business paid $1 200 for insurance on 1 October. Its year ends on 31 December. How much insurance is charged to the income statement? A. $1 200 B. $900 C. $300 D. $400 Answer: C
- Rent received during the year was $4 800, of which $400 relates to next year. What is credited to the income statement? A. $5 200 B. $4 800 C. $4 400 D. $400 Answer: C
- Which item is a current asset (an other receivable)? A. An accrued expense B. Income received in advance C. A prepaid expense D. An amount owed to a supplier Answer: C
Beschikbaar in de Green Bridge-app
Download de Green Bridge CBT-app op je telefoon of computer voor toegang tot volledige lesnotities, oefenvragen en meer.
Beschikbaar in de Green Bridge-app
Download de Green Bridge CBT-app op je telefoon of computer voor toegang tot volledige lesnotities, oefenvragen en meer.
Aanbevolen Boeken
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