prepaid income/accrued income

sscors

Hi

does anyone know why prepaid income reduces the income in the current financial year and accrued income increases the income in the current financial year?

PGM

sscors wrote: »

Hi

does anyone know why prepaid income reduces the income in the current financial year and accrued income increases the income in the current financial year?

If you have £10k of income in the current year and £2k if for work you will do in the following year, you'll prepay £2k of income to the following year, thus reducing current income to £8k

Its the opposite with accrued income, you're recognising income due, but not yet recieved.