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I don’t get the concept of accruals and prepayments , I have an o level and a level background previously but it seems that the concepts have changed , as far as I know prepaid income is a current liability as servicws have to be rendered for the amount paid but in some situations prepaid can be a current asset also in certain questions pls help
Prepayment is a current asset in your books if you are the one paying the amount and a liability to the receiver. You just need to understand whose books the question is asking about. Your books or the Suppliers….
Tumza17: Thank you for your answer, but please do not answer in this forum because it is Ask the Tutor Forum, and you are not the tutor. But please do help people in the other F3 forum. 🙂
Fazeel93: Tumza17 is correct. I do suggest that you watch our free lectures on accruals and prepayments. Our free lectures are a complete course for Paper F3 and cover everything needed to be able to pass the exam well.
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