AAT Level 3 : Add Bookkeeping : Accruals and prepayments

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Record accruals and prepayments in income and expense accounts
• That adjustments for accruals and prepayments are an application of the accrual basis
of accounting
• How opening and closing accruals and prepayments affect income and expense
accounts
• Explain the difference between the amount paid or received and the amount recognised
in the accounts
• Account for accruals and prepayments by making a double-entry in the current period
and reversing it in the future period
• Recognise the reversal of a previous period adjustment in the ledger accounts
• Calculate adjustments pro rata
• Enter adjustments in the general ledger, including the journal
• Calculate the amount transferred to the statement of profit or loss
• Use the following accounts: accruals/accrued expenses, accrued income, prepayments/prepaid
expenses, prepaid income

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