Accruals and prepayments

1. prepaid expenses

1.1. an expense to be use in the following period but has been paid in advanced

1.1.1. current asset

1.1.1.1. Example: prepaid rental, prepaid telephone bills

2. prepaid revenue

2.1. revenue received in advanced

2.1.1. current liability

2.1.1.1. Example: rent payment received in advanced

3. accrued expenses

3.1. an expense which the firm has used up,but has not yet paid for credit balance

3.1.1. current liability

3.1.1.1. Example: wages earned by employees but not paid yet

4. accrued revenue

4.1. revenue earned but not yet received in cash

4.1.1. current asset

4.1.1.1. Example: credit sales