Accrued Income
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Can anyone clarify the following for me:<BR><BR>If I accrue an expense (eg electricity £100) I understand that the book-keeping required is to DR Electricity A/c £100 and CR Accruals A/c £100.<BR><BR>If I accrue income (eg rent receivable £200) I know that I have to CR Rent Receivable A/c £200, but do I then DR the Accruals A/c that the accrued expense (above) is in, or are there separate Accruals A/c's for accrued expenses, and accrued income?<BR><BR>Assuming that it all goes into one Accruals A/c I would then have entries in the account of DR (rent receivable) £200, and CR (electricity) £100, giving a DR balance of £100.<BR><BR>Again, would I just show this accrued BALANCE of £100 with my current assets on the balance sheet?<BR><BR>Or would I show separate entries for accrued expenses (ie current liabilities £100) and accrued income (ie current assets £200)?<BR><BR>Help!<BR><BR>Lynn
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Accrued Income
I think generally assets and liabilities should be shown seperate on the balance sheet. I would accured income under the prepayments heading. When analysing this code out (in working papers) i will then show the elemnt relating to income...<BR><BR>Hope this helps!0 -
Accrued Income
Hi Lynn ,<BR>I think bowlingbazza 's answer is right. You should show seperate entries for accrued expenses (current liabilities ) and accured income ( current assets).<BR>e.g post rent receivalbe £200 on P&L Credit side as income<BR> post accural income £200 on B&S Debit side as current asset<BR><BR>good luck!<BR>chaoliss0 -
Accrued Income
Yes you always shoe Assets and Liabilities seperatly the rule is never net one off against the other.<BR>x0 -
Accrued Income
Hi, yn.<BR><BR>Is there such a thing as accrued income? Accruals are expenses that you should have paid during this accounting period and will not pay until next period. (See the Accruals or Matching Principle)<BR><BR>You are right to put accrued expenses into the accruals account at year-end as a liability.<BR><BR>However, rent receivable is due from a customer. If this was a stock customer, you would have a balance on your Sales Ledger. It is not a liability, nor even a negative liability. In fact, it is an asset. It should go into either <i>Debtors</i> (if these are your main customers, such as running a home rental business) or you can put it into an account called <i>Other Debtors</i> (if this is not your main business but you are sub-letting part of your premises).<BR><BR>Of course, if you <b>recieved </b> the rent in advance, then the customer is now a creditor because you owe them money. Therefore, in your trial balance adjustments, you would Dr Rent Receivable, Cr Creditors. because it is now a liability. Still, it does not go into Accruals.<BR><BR>Hope this helps.<BR><BR>Mike<BR>0 -
Accrued Income
Hi Lynn,<BR><BR>"Accrued income" is called deferred income and should be in your deferred income account.<BR><BR>If you have invoiced your tenant for rent three months in advance, you should put it in deferred income then every month you would do a journal DR deferred income CR rent receiveable with a third of the invoice amount.<BR><BR><BR>Terry.<BR><BR>0 -
Accrued Income
Mike<BR><BR>There is such a thing as "accrued income" according to the Osborne books!<BR><BR>The definition they give is:<BR>"Accrual of Income - Income of a business due in an accounting period which is unpaid at the end of that period"<BR><BR>I'm still confused :-((<BR><BR>Lynn0 -
Accrued Income
Oh well. You learn something new every day.<BR><BR>Thanks for the clarification.<BR><BR>(I'd still leave it as an unpaid invoice, though!) :-)0