An accrual is an item of expenditure
that has been incurred in the accounting period but has not been paid at the
end of the period. E.g. an invoice for goods which have been received but
remain unpaid at the end of the accounting period.
that has been incurred in the accounting period but has not been paid at the
end of the period. E.g. an invoice for goods which have been received but
remain unpaid at the end of the accounting period.
Prepayment is an item of expenditure
that has been paid for in the accounting period, but the consumption of the
goods or services will occur in a future accounting period. E.g. a firm has
paid its business rates to 31st March 2010, but its accounting year
ends on 31st December 2009. The payment for the period 1January 2010
to 31 March 2010 is a prepayment, because it is related to business rates for
the next accounting year.
that has been paid for in the accounting period, but the consumption of the
goods or services will occur in a future accounting period. E.g. a firm has
paid its business rates to 31st March 2010, but its accounting year
ends on 31st December 2009. The payment for the period 1January 2010
to 31 March 2010 is a prepayment, because it is related to business rates for
the next accounting year.
