{m}.{s}.1The accruals or matching concept tells us that revenues and expenses are to be brought into the profit and loss account for the period in which they are incurred.

Expense 1
Balxx  
Accrualxx  
    
    
    
Expense 2
Balxx  
Accrualxx  
    
    
    
Accruals
  Accrualxx
    
    
    
    
[{m}.{s}a]
{m}.{s}.2
Expense 1
BalxxPrep'txx
    
    
    
    
Expense 2
BalxxPrep'txx
    
    
    
    
Prepayments
Prept'sxx  
    
    
    
    

[{m}.{s}b]

 

{m}.{s}.3Income can also be accrued:

  • Credit Income to increase the balance.
  • Debit Sundry debtors to record the asset.

 

Income
  Balxx
  Accrualxx
    
    
    
Sundry debtors
Accrued Incomexx  
    
    
    
[{m}.{s}c]