Accruals and prepayments of income

Any tips on remembering what side the balance b/d is for accruals and prepayments of income?
For some reason I just can't get my head around it

Thanks in advance :)
AAT Level 3 :)

Comments

  • sdv
    sdv Experienced Mentor Registered Posts: 585
    there are some fundamental characteristics of accruals and prepayments that you must have an understanding of;

    1 Accruals always increases both income and expenses
    2 Prepayment always reduces both income and expenses

    3 Accruals on expenses are a liability
    4 Prepayment on expenses are Assets

    5 Accruals of an Income is an Assets (opposite of expenses)
    6 Prepayment of an Income is a liability (opposite of expenses)

    All assets brought down have debit balances
    all liabilities brought down have credit balances
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