Account Q-accrual/prepayment

1. Payable In Arrears 即係過後俾錢有拖冇欠; Payable in Advance係先俾錢後收貨冇錢冇得傾.

以你個交租example為例, Payable in Advance即係先俾錢, 1號前唔該俾錢, 唔俾就收樓; Payable in Arreas即係租到月底唔該俾錢, 唔俾就收樓之餘仲要claim你欠租。

2. Debenture一般係payable in arreas既, 好少聽聞有payable in advance. 但你個example就特別D, 如果05年7月1日真係俾出$6,000的話, 如你所指, 係一半in arreas一半in advance囉. In arreas既部分係4-6月, in advance部分係7-9月。

比較常見既做法應該會係:
05年7月俾05年4-6月既interest$3,000; 06年1月俾05年7-9月既interest$6,000; 打後就好清楚; 至於入a/c, 當然正路係每個月做accrual, Dr. Interest Expenses $1,000 Cr. $Accruals/Interest Payable $1,000; 到俾錢果時就Dr. Accruals/Interest Payable $6,000 Cr. Cash/Bank $6,000. 攪掂!

1. so, is it means paybale in advance/ arrears is just a term of payment determined by the 2 parties?

2011-05-16 02:40:56 補充：
2. if using yr principle in example 2 , is it exactly the same i have stated in my quoted e.g 2 that when i paid 6000$ debventure interest on 1 july(paybale semiannually), it is in fact covering period from 1 april-30 spet(6 months) so that 1 april- 30 june is payable in arrears and 1 july- 30 sept?

payable in arrears - you will pay the debt later
payable in advance - you pay the debt earlier.

In your first example, the rent is payable in advance but you cannot find any usage on this term in your example. Normally, the accounting end date is month-end. When preparing the financial statement, there is no rent payable in advance as you have already used the premises at the end of the month.

If the rent is payable on 16 March 2011 and the accounting end date is 31 March 2011, you have paid half of the rent in advance.

In your second example, using the same principle, you should pay the debenture interest in accrued for the period Jan 2005 to March 2005 at the financial year end. Hence the payable in arrear is within this period.

2011-05-16 13:36:01 補充：
Payable in arrears / in advance is a payment term in the contract.

For accounting purpose, the payable in arrears / in advance is used for determine on the financial accounting date whether adjustment is needed in the accounts.

2011-05-16 13:36:20 補充：
In your example 2, for non-accounting purpose, there is no payment term on the payable in arrears or in advance as the company needs to pay the debenture interest on 1 Jan and 1 July.

2011-05-16 13:36:28 補充：
For accounting purpose, whether you need to apportion part of debenture interest as interest expenses and liabilities. As the year-end is 31 March, you need to calculate part of debenture interest as interest expenses due to accrual principle.