Quick questions on Accrued and prepaid expenses explained: O-Level Principles of Accounts

An accrued expense is one that has been incurred but not yet paid at the year end (for example, December's electricity, paid in January). The matching principle requires it to be charged this year:

A prepaid expense is one paid in advance for next year (for example, insurance paid covering months in the next period). It is not yet incurred:

$$\text{Expense for the year} = \text{Cash paid} + \text{Closing accrual} - \text{Opening accrual} - \text{Closing prepayment} + \text{Opening prepayment}$$

The expense account is balanced so the transfer to the income statement is the balancing figure. Opening accruals sit as a credit balance b/d (owing), closing accruals as a credit balance c/d; opening prepayments as a debit balance b/d, closing prepayments as a debit balance c/d.

State how an accrued expense and a prepaid expense each appear in the statement of financial position. [2 marks]

Rent paid is \10\,000$;$\$1\,500$ is owing at year end and there was no opening accrual. State the income statement charge. [2 marks]

Insurance paid is \3\,600$, of which$\$400$ is prepaid at year end. State the expense for the year and the asset shown. [2 marks]