Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 11 - No. 5)
When preparing an income and expenditure account, which adjustments should be made?
Include all cash transactions.
Exclude depreciation expense.
Include prepayments and accruals
Include all income received.
Explanation
Prepayments and accruals must be included to ensure income and expenses are correctly matched to their respective periods.
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