"Accruals" show a DEBIT BALANCE at the YE

Hi Guys

It is easy to deal if the insurance is paid upfront, but we receive a SageCover invoices UPFRONT for the 12 month period but are paying them monthly by D/D. The Invoice date is 7th November. Year end is 31 March. The way I was posting it in Sage is as follows:

(Let's assume the Invoice amount is £432.00, i.e £36.00 p/m)

1. Post a Supplier's Invoice:

Dr Accruals <-- Cr Supplier £432.00

2. On a monthly basis:

Dr Insurance <-- Cr Accruals £36.00

3. At the Year End I have an obvious problem: My Accruals A/c has a DEBIT BALANCE, which doesn't look right, Or Does it?????

Guys, please HELP. I've got couple of a similar invoices (i.e.Car Insurance) and am stuck!. Some saying that it should be treated as a Prepayment, and it confused me completely.

Many thanks in advance. 

Comments
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Simple

BKD |
BKD's picture

Accruals OR Prepayments?

Andrew40 |

Yes ...

Steve Holloway |
Steve Holloway's picture

My way

petersaxton |
petersaxton's picture

Thank you. Your entries are

Andrew40 |

Yes

petersaxton |
petersaxton's picture

THANK YOU SO MUCH! I will try to figure it out the usefulness of

Andrew40 |

Are you sure?

Richard Willis |
Richard Willis's picture

Yes, it is indeed.

Andrew40 |

Prepayment

petersaxton |
petersaxton's picture

Accruals & Prior Year Adjustment : Interest on long-term loans

Andrew40 |

?

BKD |
BKD's picture

Assuming you're right,

Andrew40 |

Accrual

petersaxton |
petersaxton's picture

I really can't see what the issue is

BKD |
BKD's picture

Thank you again to you all.

Andrew40 |