unit 6: adjustments for income + expenses

Question 1

explain the need 4 accrued income, income received in advance, accrued expenses + prepaid expenses

Answer 1

accrued income= 2 ensure the correct profit/loss 4 the period is calculated by including income earned 4 the current period 4 which cash has not yet been received up 2 the end of the financial
income received in advance= 2 the correct profit/loss 4 the period is calculated by excluding income already recorded during the current period 4 which cash has already been received 4 the next financial period.

accrued expenses= 2 ensure the correct profit/loss 4 the period is calculated by including expenses incurred 4 the current period 4 which cash has not yet been paid up 2 the end of the financial year
prepaid expenses=