{"id":5665,"date":"2023-07-12T20:02:35","date_gmt":"2023-07-12T20:02:35","guid":{"rendered":"https:\/\/crystalsoft.com.eg\/?p=5665"},"modified":"2023-11-26T12:43:23","modified_gmt":"2023-11-26T12:43:23","slug":"about-the-expenses-provided","status":"publish","type":"post","link":"https:\/\/crystalsoft.com.eg\/en_us\/about-the-expenses-provided\/","title":{"rendered":"About the Expenses Provided"},"content":{"rendered":"\t\t
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Advance expenses and accrued income<\/h5>\n

Money management is an important part of our daily life, it is fundamental in achieving goals and achieving financial well-being. One of the most important aspects of money management is understanding the provided expenses and accrued income, and the difference between them. In this article, we will discuss the concepts associated with expenses and income and how to deal with them.<\/p><\/div><\/div><\/div>\r\n\t\t<\/div>\r\n\t\t\r\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Financial management is considered one of the most important departments in any commercial organization, it is concerned with the management of money and funds, it is based on the calculation of expenses provided and accrued income. In this article we will talk about the provided expenses, accrued income and the difference between them, as well as an explanation of the types of expenses and income and an illustrative example of each type.<\/p><\/div><\/div><\/div>\r\n\t\t<\/div>\r\n\t\t\r\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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It is necessary for any person who owns his own business or works as an accountant in a company to familiarize himself with the concept of Provided expenses and accrued income. These crucial terms are an integral part of accounting, help to understand the financial condition of the company or enterprise. In this article, we will take an overview of what are provided expenses and accrued income, explain the difference between them. <\/p><\/div><\/div><\/div>\r\n\t\t<\/div>\r\n\t\t\r\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Provided expenses and accrued income speak about payments and financial income that were recorded in the books of accounts. Advance expenses refer to payments that must be made in advance on purchased items or services that have not yet been used. This includes wages, rent, prepaid bills and other expenses. <\/p><\/div><\/div><\/div>\r\n\t\t<\/div>\r\n\t\t\r\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Accrued expenses represent expenses for services related to the current year but not paid in the current year and are reflected in the liabilities side of the statement of financial position (budget). <\/p>\n

Advance expenses and accrued income are two of the most important accounting concepts that any financial manager should know well. These concepts help to determine the health and stability of the business and help to effectively manage resources. But before talking about the difference between provided expenses and accrued income, let's talk about the concept of each of them. <\/p><\/div><\/div><\/div>\r\n\t\t<\/div>\r\n\t\t\r\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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What are the expenses provided ? <\/h5>\n

Advance expenses are payments that must be made in advance for services or materials that have not yet been used that the company needs. The provided expenses include, for example, salaries, wages, rental costs, production costs, supplies necessary for operation, including consumables, sanitary ware and others.. The submitted expenses must be recorded in the books of accounts as an expense <\/p><\/div><\/div><\/div>\r\n\t\t<\/div>\r\n\t\t\r\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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An example of Provided expenses
<\/strong><\/h5>

The submitted expense \"does not appear in the income statement\" appears in the current assets because it is the right of the company to third parties.<\/p>

Example: EGP 120,000 rent was paid for the current year 2022 and next year until the end of 2023<\/p>

The part related to the current year is called general expenses wages and is shown in the income statement<\/p>

Wages are recorded as public expenses every month for a year 60,000 thousand EGP the value of the monthly rent is recorded as follows:<\/p>

\u00a0 \u00a05000 EGP of H \/ general expenses \"Rents \".<\/p>

\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a05000 EGP to H \/ the bank or Treasury.<\/p>

The part that concerns the following year is called an advance expense and is shown by current assets in the statement of financial position<\/p>

\u00a0 \u00a060000 EGP of H \/ advance payment \" Rents \"<\/p>

\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 60000 EGP to H \/ bank or Treasury<\/p><\/div><\/div><\/div>\r\n\t\t<\/div>\r\n\t\t\r\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Types of expenses provided<\/h5>

Expenses can be broadly divided into operating expenses, general and administrative expenses.
Examples of operating expenses include:<\/strong><\/p>

1-expenses of raw materials necessary for production.<\/p>

2-wages and salaries for the operational process.<\/p>

3 - expenses of the number and tools necessary for production.<\/p>

Examples of general and administrative expenses include:<\/strong><\/p>

1-wages, salaries and the like for employees in exchange for the work they do.<\/p>

2-rental expenses, which represent the rent of the administrative headquarters or shops.<\/p><\/div><\/div><\/div>\r\n\t\t<\/div>\r\n\t\t\r\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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The difference between advance expenses and accrued expenses?<\/h5>

Advance expenses:<\/strong><\/p>

  • It includes payments made in advance for the purchase of goods, services or to pay other costs.<\/li>
  • They are recorded in the accounts payable of the company.<\/li>
  • They are consumed immediately after payment and are not postponed.<\/li><\/ul><\/div><\/div><\/div>\r\n\t\t<\/div>\r\n\t\t\r\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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    Accrued expenses: <\/h5>\n
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    • Includes payments that have been postponed and have not been paid yet. <\/li>\n \t
    • They represent the obligations that the company must repay in the future. <\/li>\n \t
    • They are recorded in the accounts receivable of the company. <\/li>\n \t
    • The depreciation of these expenses is postponed to the period when payment on them is due. <\/li>\n<\/ul><\/div><\/div><\/div>\r\n\t\t<\/div>\r\n\t\t\r\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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      An example of accrued expenses <\/strong><\/h5>

      Q: there are electricity and water expenses of EGP 8000 that have not been paid this year<\/p>

      Due on 31\/12\/2023<\/p>

      \u00a0 4000 of H \/ general expenses-electricity and water<\/p>

      \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a04000 to H \/ accrued expenses-electricity and water<\/p>

      When the payment is made in the coming year 2024, it will be<\/p>

      \u00a0 4000 of H \/ accrued expenses-electricity and water<\/p>

      \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a04000 to H \/ bank or Treasury<\/p><\/div><\/div><\/div>\r\n\t\t<\/div>\r\n\t\t\r\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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      What is the accrued income: <\/h5>\n

      Accrued revenue is considered income that is collected from customers but has not yet been collected. These revenues are also considered temporary revenues because they will be collected later. For example, if a company provides a service to customers and its fees have not yet been paid, this amount will be classified as accrued income and will be collected in the coming months. <\/p>\n

      While the presented revenue is an unearned revenue until the date of preparation of the final accounts for the year, it appears next to the budget obligations, for example, amounts received for a service or a good that was not provided to the client until that date, and when presented to the client, it becomes accrued revenue. <\/p><\/div><\/div><\/div>\r\n\t\t<\/div>\r\n\t\t\r\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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      The difference between provided income and accrued income? <\/strong><\/h5>\n
      Income provided: <\/strong><\/h5>\n