Explain what are prepayments and give an example

Assignment Help Accounting Basics
Reference no: EM132477281

Accruals & Prepayments

Masha and the Bear Inc. had several expenses during 2018. Some of them were the below:

Expense Account

US$

Electricity

Water

Salaries

It is now 15 February, and the accountant has to make some final entries before the financial records of 2018 are closed. She noted the below:

1. The audit of 2018 will start in the beginning of March. For the past two years the audit fee has been the same and it is expected to be the same for 2018 also. This has amounted to $5,000.

2. Electricity paid in 2018 did not include December 2018 (it was paid in January 2019) and the portion for this month was $500.

3. The water expense paid in January 2019 included also December 2018 which amounted to $300.

4. During the Christmas holidays, an employee requested an advance against his salary, i.e. to receive half of January 2019 salary in December. This amount was $1,500.

Required:

Question 1: Explain what are accruals and give an example.

Question 2: Explain what are prepayments and give an example.

Question 3: Prepare the below accounts (taking also into account the notes) for 2018

Question 4: indicating the amounts that should be reported in the Profit and Loss account, and Balance Sheet Account at the end of the year. You are required to present also extracts of the Profit and Loss account, and Balance Sheet Account for 2018.

Reference no: EM132477281

Questions Cloud

Compute the january balance for crane accounts : Compute the January 31 balance for Crane accounts. Crane's sales journal for January shows a total of $112,000 in the selling-price column
What do you think is going wrong in each case : In the following scenarios, try to imagine the brain of a person with the described head injury. What do you think is going wrong in each case?
Determine which account should be credited : Truck is being invested in the business, Truck is coming in as an asset, so it will be debited.But, Determine which account should be credited?
Explain how external factors affect organisations : Evaluates the impact of a named organisations vision and mission on its strategy and analyses how external influences affect organisational strategy
Explain what are prepayments and give an example : Explain what are accruals and give an example.Explain what are prepayments and give an example. Prepare the below accounts (taking also into account the notes)
Describe and discuss a need for an after school program : Describe and discuss a need for an after school program. Describe the purpose of conducting a needs assessment for your selected.
Compute the companys depreciation charge for the year : Compute the company's depreciation charge for the year to 31 July 20X7 using The straight line method, The reducing balance method,
Explain the difference between making allowance for bad debt : Explain the difference between making an allowance for bad debts, and writing off a bad debt. Explain how each case is treated and shown in accounting
Define the types of prostitution : Create a 6- to 8-slide PowerPoint presentation (including a title and reference slide) addressing the following: Define the types of prostitution.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd