Admin and distribution expenses

"If interest is accrued is this added to finance costs?"

Yes, that is correct. The general layout (by function) for the SPL will be;

Revenue - COGS = Gross profit
Gross profit - Overheads = Operating profit
Operating profit - Finance costs = Profit before tax
Profit before tax - Tax = profit after tax

I found it easier to have a pro-forma like this in my head. Then you learn what types of expenses go where after. Like returns and carriage will form part of COGS, any indirect expense like admin and most non-cash charges like depreciation and bad debt (yes irrecoverable is the same) will be overheads.

"In regards to prepayments and accruals - if they are in the tb do they go in here or not?"

You can split a trial balance into 2 parts. Part will form the SPL and the other will for the SFP. Prepayments and accruals have an entry in each.

For example;

Say at year end a company owed the last quarters telephone bill, entries would be;

DR Telephone bills account (This will go into the SPL)
CR Accruals (This is held in the SFP until paid)

For prepayments the entries would be;

DR Prepayments (Held in SFP as an asset)
CR Advertising (This will reduce the expense in the SPL)

"In additional info if something like advertising is to be accrued - add to distribution, prepay deduct?"

You would add to advertising.

"If it is insurance accrual add to admin or deduct a prepayment"

Insurance accrual could be added to whatever class of expense you want, can even have its own insurance account. This is why I suggested the pro-forma above, it's just an overhead. Accruals and prepayments are different, they do not interact. An accrual is an expense owed, a prepayment is pro-rata of an expense because some of it belongs in the next financial year. This mainly happens with annual subscriptions.

Hope this helps.

I'll try to be as clear as I can.

Technically the trial balance will be split into 3 parts.

1. Profit and loss
2. Assets and liabilities
3. Adjustments

The adjustments will contain:

Accruals
Prepayments
Depreciation charges
Closing inventory
Bad debt
Allowance for doubtful debts

Each one of these adjustments has a debit and a credit like all other transactions. However, each of these adjustments will have an effect on both the 'profit and loss' part and the 'assets and liabilities' part. So if one has a debit in the 'profit and loss' it will have a credit in the 'assets and liabilities' and vice versa.