Accrual
An expense incurred but not yet paid or invoiced.
A liability for goods or services received or consumed in the period that has not been paid or invoiced by the reporting date.
Passende Übungsfragen
☝️ Single
Financial statements are normally prepared on the going concern basis. What does this mean?
Assets are always measured at the amount the entity could obtain by selling them immediately
The entity is assumed to continue in operation for the foreseeable future, with no intention or need to liquidate or curtail its operations materially
The entity is expected to make a profit in every future accounting period
Income and expenses are recognised when cash is received or paid
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☝️ Single
A company recognises revenue when goods are delivered to the customer, even though the customer will pay in the following month. Which accounting basis or concept does this reflect?
The accruals basis
The business entity concept
The cash basis
The prudence concept applied to revenue
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☝️ Single
At the year end, electricity of £480 has been consumed but the invoice has not yet been received or recorded. What is the correct year-end adjustment?
Debit electricity expense £480; credit accruals £480
Debit accruals £480; credit electricity expense £480
Debit prepayments £480; credit electricity expense £480
No adjustment is needed until the invoice is received
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