Accrual and Prepayment Entries

[Shargeel]

Hello friends,
Those who have some problem while remembering and understanding the entries of Accrual and Prepayment that is very simple.U will just have to memorize the names of Accrual and Prepayment as below.

EXPENSE ACCRUED
DR EXPENSE ACCOUNT
CR ACCRUALS

PREPAID EXPENSE
DR PREPAID
CR EXPENSE ACCOUNT


ACCRUED INCOME
DR ACCRUED INCOME(BS)
CR INCOME(IS)


INCOME PREPAID
DR INCOME(IS)
CR PREPAID INCOME(BS)

If u can remember the names like this u cannot forget the Journal Entries of Accruals and Prepayments.e.g In the name EXPENSE ACCRUED in this the Expense written first that means in the Journal Entry of Accrued Expense EXPENSE is Debited and Accruals are credited.Same with the other.The name written first is Debited in the jounal entry and secound one is Credited.If there is some mistake please do inform me.:)

[RoyN]

this is great, ive been struggling to remember this, but this so clear, thank you so much