Chapter 7_Important Flashcards Preview

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Flashcards in Chapter 7_Important Deck (2):

Accruals and prepayments

The accruals basis of accounting means that to calculate the profit for the period we must include all the income and expenditure relating to the period , whether or not the cash has been received or paid or an invoice received


Accrued expenditure

An accrual arises where expenses of the business for the current period have not been paid at hte end of the year