AAT Level 3: Accruals & Prepayments in the Ledger Accounts

Accrued Expenses

• An accrued expense increases the balance on the relevant expense account. It is therefore recorded in the financial year to which it relates and increases the balance of the relevant expense account on the years's statement of profit or loss.
• The value of the accrued expense is also recorded in the accruals account as a liability, as it will need to be paid in the following year, and is shown…