accounting help!!!!

[BornToDie]

section 4.3 of our syllabus says that "prepare ledger accounts and journal entries to record accrued and prepaid incomes"...

i know about the accrued but how do we treat the prepaid in comes
i.e. where do they appear in the profit and loss a/c and the balance sheet....?

do they even have to be shown during that year??

answer quick!! plz!

 

[Giraffe195]

You have to take it to its own account. Example, Subscriptions. All the prepaid, accrued, and current payments are taken to the subscriptions account. From that account you calculate what goes in the Income and expenditure account. Same thing with all the others.

 

[exampasser]

Example : If you pay $1,000 Rent. Pretend the question says $200 is a prepayment.

In the Profit and Loss account : Rent goes as an expense as usual, but you reduce the prepayment, so value in the profit and loss account for Rent is (1,000-200) = $800

In the Balance Sheet, the prepayment is a current asset, so it would come under current assets as Rent - $200

Hope that helped.

 

[leena]

can any1 tell me da meaning of da following terms:
OVERSTATED
UNDERSTATED

OVER VALUED
UNDER VALUED

plz can any1 help me

 

[BornToDie]

overstated means something is shown higher than what it is.
eg: if slaes are actually $1000 but they are by mistake shown as $2000, they are overstated

understated is the opposite. in this eg slaes will be understated if they are shown as $500.

overvalued and undervalued are the same.

hope this gets to u in time....