Accounting again; accruals and prepayments on cashflows-indirect method?
I can't find anything on the internet. So I was thinking if for example expense on profit and loss was larger than the actual cash paid, then to move from my profit figure to the cash I add on the difference of P&L and the cash paid and vice versa? Is that true for any deffered payments? Noone replied to my last accounts question so Im worried. Please do so if you know anything about this-thank you very much!!!!
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Answer 1 :
For Expenses: P&L Charge = Pre-payment b/f - Accrual b/f +Amount Paid - Pre-payment c/f + Accrual c/f. So swapping around to get cash flow from P&L: Cash Flow (out) = P&L + Acc b/f - Acc c/f - PP b/f + PPc/f. I hope that this gets you started. PS I have answered your other question.
