Accounting·Final accounts & financial statements · NSSCO 1.2
Accrued & prepaid income and expenses
Narrated lesson · press play
These are the little end-of-year adjustments that make our profit honest. Using the matching principle, we'll meet the four adjustments — accrued expense, prepaid expense, accrued income and income received in advance — and for each one do a real N$ example, write its General Journal entry, post it to the ledger, and see exactly how it lands in the final statements.
What you'll learn in this lesson
By the end you should be able to (NSSCO Accounting 1.2):
- Explain accrued expenses, accrued income, prepaid expenses and income received in advance (using the accrual/matching principle)
- Prepare General Journal entries for adjustments and post to the General Ledger
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