The below webinar takes you through the whole life cycle of entering and reversing Accruals and Prepayments. You will see how to enter accruals and prepayments, how to calculate the charge for the year. Then finally, you will be able to see how to reverse accruals and prepayments in the following year. The webinar has been recorded so you can pause and recap should you so need to.
This is a crucial skill for all accountants, and is a key part of the advanced bookkeeping units at level 3.
After you have watched the webinar on accruals and prepayments there is a question which you can attempt to test your learning. Remember these are just tools to match the expense or income to the year that it relates to.
You can check your answers with the debrief below, and hopefully will have the correct answers. However, the debrief will take you through the questions step by step.
Also if you are looking for extra help, we also have a blog on accruals and prepayments which you might find useful here.
The principles used for expense are also used to match income to the relevant accounting periods, for example income received in advance. Or this could be accrued interest.
Finally remember at this level this is one of the hardest subjects. So if you do not grasp it first time, please don’t despair. Practice does make perfect.