2012最新ACCA考试-F3管理会计讲义Session 72012最新ACCA考试-F3管理会计讲义Session 7 Session 7 Accruals and prepayments Main Contents： 1.Accrued and prepaid expenses 2.Accrued and prepaid income 3.Prepayments and accruals in the financial statements 7.1 Accrued and Prepaid expenses ● Accrual basis of accounting: The accrual basis of accounting is to record the income and expense in the statement of income as they are earned/ incurred regardless of whether cash has been received/ paid. ● Accrued expenses Accrual: an item of expenses that has been incurred during the accounting period but has not been paid at the period end. Dr. Cr Expense account xx Accrual xx Accruals are shown as Liability in the SFP. ● Prepaid expenses Prepayment: an item of expenses that has been paid during the current accounting period but will not be incurred until the next accounting period. Dr Cr Prepayment xx Expense account xx Prepayment are shown as Asset in the SFP. Example 1: A started its business on 1 January 20x2, making up accounts to 31 December 20x2.Electricity bills received were as follows: 20x2 20x3 $ $ 31 January --- 6,491.52 30 April 5,279.47 31 July 4,663.80 31 October 4,117.28 What should be the electricity charge for the year ended 31 December 20x2? Solution: Electricity charge paid in the year: 30 April 5,279.47 31 July 4,663.80 31 October 4,117.28 14,060.55 Accruals 6,491.52 x 2/3 4,327.68 Total electricity charge 18,388.23 Double entry for the accruals Dr.Electricity account 4,327.68 Cr.Accruals （liability） 4,327.68 Example 2: Hillyard opened for business on 1 January 20x6 in a new shop which was on a 20 year lease.The rent is payable quarterly in advance and amounts to $20,000 per year.The payments were made on what are known as the “quarter-days” （except for the first payment） as follows. $ 1 January 20x6 5,000.00 25 March 20x6 5,000.00 24 June 20x6 5,000.00 29 September 20x6 5,000.00 25 December 20x6 5,000.00 What will the rental charge be for the year ended 31 December 20x6? Solution: Rent charge paid in the year 1 January 20x6 $5,000 25 March 20x6 $5,000 24 June 20x6 $5,000 29 Sept.20x6 $5,000 25 December 20x6 $5,000 25,000 Prepayment （5,000） Rental charge for the year 20,000 Double entry for the prepayment Dr.Prepayment （asset） 5,000 Cr.Rent account 5,000 7.2 Accrued and prepaid income Some organizations also have sources of miscellaneous income which may also be received in advance or arrears. Accrued income: income has been earned in the accounting period but has not yet been received. Dr. Cr. Accrued income xx Income xx Accrued income is an asset item in the SFP statement. Prepaid income: income has been received in the accounting period but which relates to the next accounting period. Dr. Cr. Income xx Prepaid income xx Prepaid income is aliability item in the SFP statement. Example: Elaine sublets part of her business space for a quarterly rental in advance of $900.The payments are due on 1 March, 1 June, 1 September and 1 December each year and are always paid on time. Write up her rental receivable account for the year ended 31 December 2001. Solution: Dr.Cash 900 Cr.Rental income 300 Cr.Prepaid income 600 Example: Phebie is preparing her accounts for the year ended at 31 December 2007.She has a sources of miscellaneous income: Rent.Rent invoices totaling $74,936 were issued and posted to the ledgers during the year.$23,985 of these invoices relates to periods in 2008.In 2006 $17,625 of invoices were issued in respect of rent periods in 2007. Prepare the ledger accounts for these items. Dr.Rental receivable 74,936 Dr.Accrued income 17,625 Cr.Rental income 68,576 Cr.Prepaid income 23,985 7.3 Prepayments and accruals in the financial statements The statement of financial position （ B/S） ASSETS CAPITAL AND LIABILITIES Currents Current liabilities Inventories Payables Receivables Accruals Prepayments Prepaid income Accrued income Cash at bank Cash in hand The income statement: Accruals or prepayments of income and expenditure are included within the normal income/ expense charges in the I.S. Example: Electricity paid during the year is $14,000.There was an opening accrual b/f of $500.A bill for the quarter ended 31 Jan 20x7 was $900.What is the electricity charge in the income statement for the year ended 31 December 20x6? A.$14,000 B.$14,100 C.$13,900 D.$14,400 Answer B. |
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