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If you pay something in arrears then it means you pay it after you have used the service.
For example, in the UK people pay their electricity bill every three months. However they pay it after the end of the three months (because they can only know the amount used once the three month period has ended). They are paying in arrears i.e. paying late.
The alternative is paying something in advance. For example if you buy insurance for the year, you pay it before the year starts. This is paying in advance.
I do explain all of this in my free lectures. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
John Moffat wrote:If you pay something in arrears then it means you pay it after you have used the service.
I get you sir. But in the practice test available on the website, there was one question in which the rent received at the year end was given(cash). Then a few details were given . According o the details , rent in arrears at that year end was also given. Seeing the solution, I saw that they had added that amount to the cash received. But isn’t that amount already included in the cash received?
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