im having a few issues still

gingervicki Feels At HomeRegistered Posts: 87
Hi, im doing FRA 2moro and i cant get a past paper anywhere near right yet on section 1

i really struggle with bd balances on what side when it comes to prepayments/accruals in the rent account (those who have looked at the papers will know what i mean)

i try to go back to the begining, start with the bank but i just get all stressy about it and mess it up!!!

am i right in thinking i treat the rent account in the same way i do SLControl (DR) and PLcontrol (CR) (entries are other way around on the P&L)????

im gonna major get this wrong 2moro i just know it - i get into the exam and i lose my head

Desperate for something to sink in!!!!



  • Richard
    Richard Trusted Regular Registered Posts: 373
    I deal with them by remembering that in the first stage a prepayment is a debit, then you clear the entry off at a later stage by crediting the account. Accruals is the opposite, the first stage is to credit the accruals account, then is debited later on.

    Are you referring to the rent question on the Dec 05 paper?

    If so, you credit the rent account £1000 as you are carrying forward an accrual from the previous period (you've made an adjustment to the figures to reflect a more realistic figure for the rent), and you also credit £2000 as you have prepaid the rent for two months. The rent you have prepaid for November and December are irrelevant for this accounting period, so need to be taken out of the figures. The following year, you would pass opposite entries - ie debit Rent £2000, and credit Prepayments.

    I hope this helps.
  • carla030698
    carla030698 Well-Known Registered Posts: 112
    Hi Vicki,

    Dont worry your not on your own, it just dosnt seem to sink in where everything should go in the ETB for me!

    As for the accruals and prepayments, I always remember it as prepayments are always a debit in the tb and accruals are always a credit, so for example in the rent account, the rent account should end up with the balance as a credit so that the double entry to the prepayment account will always be a debit.

    For example: Debit - Prepayment (as always)
    Credit - Rent Balance (prepayment)

    Dont know if that made any sense but hope it helped a little!

    Good luck for tomorrow!!! :thumbup:
  • gingervicki
    gingervicki Feels At Home Registered Posts: 87
    ok im treating the rent account as a subsidiary account almost ?? as the enrties are always the other way around

    lol this is basic stuff and i seem to have lost my mind - i think i sit and look at it so much it makes me doubt myself, and thats when i end up changing things

  • Richard
    Richard Trusted Regular Registered Posts: 373
    Rent is treated as an expense on the P&L account - accruals and prepayments is all about making the account accurate for the period the accounts cover.

    In the question on the exam paper, we can assume that the rent is £1,000 per month, ( £12,000 / 12 ), but we have actually paid £15,000 from the bank account - therefore we have paid £3,000 too much. This £3,000 comes from 2 months prepaid for the following accounting period, and £1,000 from the previous period. We then use the accruals and prepayments to correct the figure. We debit Prepayments £2000, credit Rent £2000 - to make a 'provision' for Rent in the following accounting period, and debit Accruals £1,000, credit Rent £1,000 as in effect the rent has already been shown as a payment in the previous year.
  • gingervicki
    gingervicki Feels At Home Registered Posts: 87
    ok i think im getting it now - god why am i struggling so much with it???


    hope anyone else who is having trouble gets an epiphany about it all- i however am hoping for a miracle!!!
  • Elena
    Elena New Member Registered Posts: 11
    Hi, have some notes if that helps for unit 5.

    PM me your email and I'll send them over.

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