A prepayment is an amount paid in advance for an expense which relates to an accounting period after the year end. In accounting for prepayments, the effect that needs to occur will be to reduce the relevant expenditure in an attempt to account for the transactions which have been overpaid and then to increase … Read More

  An accrual is an amount outstanding for payment by the end of an accounting period, so has not been entered into the ledger accounts. In accounting for accruals, the effect that needs to occur will be to increase the relevant expenditure in an attempt to account for the outstanding transactions which may not have … Read More

Below is a handy chart on accounting adjustments: prepaid expenses, prepaid income, accrued expenses and accrued income. Knowing what to debit and what to credit for each will come in handy in your exams. Accruals and Prepayments – YouTube

WHAT IS THE EMPLOYMENT STATUS OF SANTA’S HELPERS? Elf-employed! WHY DID SANTA HAVE TO FIT BOOSTER SEATS AND SEAT BELTS ON HIS SLEIGH? Its because of elf and safety! It is our sincere hope that you get a pleasant visit from Santa J. We hope and trust you have a nice and pleasurable season and … Read More

What is tax evasion? What is tax avoidance? Who is asking? Why? Never mind the answer, it’s all legit!

CLASSIFICATION OF COSTS BY BEHAVIOUR  Classifying costs by behaviour requires you to classify the costs into Variable costs Fixed costs Semi-variable costs Stepped costs Variable costs- these are costs that vary with the level of production or activity. It is usually assumed to vary in direct proportion to production. For example, if you make twice … Read More

What do you believe about the career path you have chosen? For most people this is a strange question – we rarely spend time thinking about our own beliefs. A quick answer to this is- many people think that the accounting profession is a well-paid profession, especially, when you are a qualified Accountant. The collection … Read More

HIGH/ LOW POINT METHOD Splitting of semi-variable costs Included in semi-variable costs is an element of both fixed and variable costs. In cost accounting it is important to be able to split these costs and identify the variable costs separately from the fixed costs and this is achieved by using the ‘high/low’ method. The idea … Read More

What is the definition of an Accountant? Someone who solves a problem you didn’t know you had in a way don’t understand Accruals, prepayments, adjustments to accounts are all legit I’m sure you know that!!! I’m hope you know what accruals and prepayments are! They are just one of those things Accountants use to confuse … Read More

TRIAL BALANCE   The Trial Balance is used to check the arithmetical accuracy of the accounting entries in the ledgers after the last transaction of a trading period has been entered and before the preparation of the Final Accounts. The Trial Balance shows the closing balances of each general ledger account on a periodic bases, … Read More