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Accrual, prepayment or both?

Hi everyone,

Sorry about this but accruals and prepayments just bug the life out of me....

I have to post our non-domestic rates bill to the accounts. The bill is dated 04/07/2018 and covers the period 01/04/18 - 31/03/2019.
The question is what is the best way to post this to the accounts ensuring that the cost is spread evenly throughout the year?



  • CSan89CSan89 MAAT Posts: 207
    Im guessing that the year end is 30/06/18? If so then you could do an accrual of 3/12 of the amount which would cover it.
    AAT Level 2&3 - 2016
    AAT Level 4 - 2017
    Personal Tax, Business Tax and External Auditing

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    Certificate Level - Jan 2019
  • charlottemcclaircharlottemcclair BirminghamRegistered Posts: 27
    If your're posting the actual invoice, do you already have an accrual in for the bill if so you would need to release it and post the invoice in the current month then prepay the rest of the months, releasing the prepayment month by month.

    You don't need an accrual if you are posting an invoice as this will already debit the expense account.
  • UncleboobotUncleboobot Registered Posts: 43
    Apologies for the delay in returning to this - when did life get soooo busy?

    @csAN89 good question - and again my apologies for missing out that critical piece of information. The year ends 28th Feb
  • SimplyLearnFinanceSimplyLearnFinance UKRegistered Posts: 17
    @charlottemcclair is correct and on the money. As y/e is 28th February you will have 1/12th as a prepayment to cover March 2019.
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