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Year End Adjustments – Accruals and Prepayments

Year End Adjustments – Accruals and Prepayments. Accrued expenses Prepaid expenses Accrued revenue Prepaid revenue. Electricity Bill. Paid $500. Accrued Expenses. In 2003,. $800. At the year end,. Accrued Expense. = $300. Insurance. Paid $30,000. Prepaid Expenses.

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Year End Adjustments – Accruals and Prepayments

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  1. Year End Adjustments – Accruals and Prepayments • Accrued expenses • Prepaid expenses • Accrued revenue • Prepaid revenue

  2. Electricity Bill Paid $500 Accrued Expenses In 2003, $800 At the year end, Accrued Expense = $300

  3. Insurance Paid $30,000 Prepaid Expenses In 2003, Annual Premium At the year end, $10,000 Prepaid Expense = $20,000

  4. Sales commissions received Received $750 Accrued Revenue In 2003, At the year end, Accrued Revenue $900 = $150

  5. Rent received Received $18,000 Prepaid Revenue In 2003, At the year end, Prepaid Revenue $1,000 per month = $6,000

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