OxfordAQA IGCSE Accounting: Adjustments for payables, receivables and income (9215) – Revision Notes

These notes condense the adjustments for other payables, other receivables, income due and income received in advance from section 3.3 of the OxfordAQA International GCSE Accounting (9215) specification, version 1.2 (exams from May/June 2026). Section 3.3 sits within the content for Paper 1 (content 1 to 3) and Paper 2 (content 3 to 5). Full explanations and worked ledgers are in the study guide. Test yourself with the practice questions. Course links: the OxfordAQA IGCSE Accounting hub, the printable checklist and the free diagnostics. Amounts in these notes are in dollars.

The principle in one line

Accruals concept: each item of income or expense is placed in the year it relates to, whatever the date of the cash payment or receipt.

The four adjustments at a glance

Adjustment	Meaning	Effect on profit	Statement of financial position
Other payables	Expense used, not yet paid	Profit down	Current liability
Other receivables	Expense paid, not yet used	Profit up	Current asset
Income due	Income earned, not yet received	Profit up	Current asset
Income received in advance	Cash received, service not yet given	Profit down	Current liability

Formulae

Use these as a check on your ledger. The opening figure is the balance brought down at the start of the year and the closing figure is the balance at the year end.

Account	Figure transferred to the income statement
Expense with other payables	Paid - opening owing + closing owing
Expense with other receivables	Paid + opening prepaid - closing prepaid
Income with income due	Received - opening due + closing due
Income with income received in advance	Received + opening in advance - closing in advance

Pattern: for anything you owe or are owed at the start, the opening amount belongs to last year, so reverse it. For anything outstanding at the end, the closing amount belongs to this year (or to next year), so apply it.

Method in steps: balancing the ledger account

1. Write the account name and enter the cash paid or received during the year.
2. Enter the opening balance brought down on its natural side (liabilities on the credit side, assets on the debit side).
3. Enter the closing balance carried down on the opposite side from its brought down side.
4. Find the balancing figure, which is the transfer to the income statement.
5. Total both sides. They must be equal.
6. Bring the closing balance down on the first line of the new period.
7. Copy the closing balance to the statement of financial position, under the right heading.

Which side? A quick table

Adjustment	Opening balance on	Balance c/d on	Balance b/d on
Other payables	Credit	Debit	Credit
Other receivables	Debit	Credit	Debit
Income due	Debit	Credit	Debit
Income received in advance	Credit	Debit	Credit

Small worked reminders

Fraction method: an annual maintenance contract of 2,400 is paid on 1 October and covers twelve months. The year end is 31 December. Months used: 3, so the charge is 2,400 x 3/12 = 600. Months left: 9, so the other receivable is 2,400 x 9/12 = 1,800.

Profit correction: a draft profit of 15,000 omits 300 owing for telephone and 200 of commission due. The adjusted profit is 15,000 - 300 + 200 = 14,900.

Statement layout reminder: the expense or income appears in the income statement at the adjusted figure, while the closing balance appears separately in the statement of financial position.

Worked reminder: one ledger from start to finish

This account belongs to Norwick Cafe. Gas: owing at the start 180, paid 2,150, owing at the end 240.

Gas account
Debit		Credit
Bank	2,150	Balance b/d	180
Balance c/d	240	Income statement	2,210
	2,390		2,390
		Balance b/d	240

Check with the formula: 2,150 - 180 + 240 = 2,210. The 240 goes to current liabilities as other payables.

Where each figure goes

Figure	Income statement	Statement of financial position
Adjusted expense (other payables or other receivables)	Deducted from gross profit	Not shown
Closing other payables	Not shown	Current liabilities
Closing other receivables	Not shown	Current assets
Adjusted income (income due or in advance)	Added to gross profit	Not shown
Closing income due	Not shown	Current assets
Closing income received in advance	Not shown	Current liabilities

Checklist before you move on

• I can state what the accruals concept means and link it to each adjustment.
• I can name which adjustments are assets and which are liabilities.
• I can balance an expense account and an income account that have opening and closing balances.
• I can work out a prepaid or owing amount from dates and months.
• I can show the adjusted figure in the income statement and the closing balance in the statement of financial position.
• I can correct a draft profit for omitted adjustments.

Must-know distinctions

• Other payables versus trade payables: other payables are for expenses such as electricity or wages, whereas trade payables are owed to suppliers of goods for resale. Do not mix them in one ledger.
• Other receivables versus income due: other receivables are expenses paid early, while income due is income earned but unpaid. Both are current assets, but they are separate lines.
• Other payables versus income received in advance: each is a current liability, but the first is a cost still to be paid and the second is money taken before the service.
• Cash paid versus the charge for the year: they are equal only when the opening and closing balances are both zero or cancel out.
• A balance carried down versus brought down: carried down closes the old period and brought down opens the new one.
• Reversal at the start of a year: an amount owing or prepaid at the end of one year becomes the opening balance of the next, so it is dealt with again when the next payment or receipt is recorded.

Quick self-test

Answer all ten from memory, then check below. Businesses are invented.

1. Hartsop Bikes paid 900 for rates. There was 120 owing at the start of the year and 150 owing at the end. What is the charge to the income statement?
2. Pickwell Studio paid 1,500 for insurance. It had 200 prepaid at the start and 260 prepaid at the end. What is the charge?
3. A tenant paid Mayhew Lettings 3,300 during the year. At the start the tenant owed 100 and at the end owed 180. How much rent is income for the year?
4. Radnor Fitness received 2,400 in membership fees. At the start 300 was held in advance and at the end 500 is held in advance. What is the income for the year?
5. A magazine subscription of 3,600 is paid on 1 October for twelve months. The year end is 31 December. State the charge for the year and the other receivable.
6. A business omits 400 of electricity owing from its draft figures. What happens to profit when the adjustment is made?
7. On which side of an insurance account is the prepaid balance brought down?
8. Under which heading in the statement of financial position is income received in advance shown?
9. A draft profit of 12,000 does not include 250 of income due, 180 of other receivables and 90 of other payables. Find the adjusted profit.
10. Which accounting concept requires these adjustments?

Answers

1. 900 - 120 + 150 = 930.
2. 1,500 + 200 - 260 = 1,440.
3. 3,300 - 100 + 180 = 3,380.
4. 2,400 + 300 - 500 = 2,200.
5. Charge 3,600 x 3/12 = 900. Other receivable 3,600 x 9/12 = 2,700.
6. Profit is reduced by 400.
7. The debit side.
8. Current liabilities.
9. 12,000 + 250 + 180 - 90 = 12,340.
10. The accruals concept.

Where marks are usually lost

• Using the wrong sign for the opening balance, so that the charge comes out too high or too low.
• Leaving out the balance brought down or the line for the new period, or placing it on the wrong side.
• Writing “accrual” or “prepayment” on the statement of financial position when the question uses the specification’s terms. Match the wording the question uses.
• Showing the cash paid in the income statement instead of the adjusted figure.
• Treating income received in advance as an asset or as income for the year.
• Forgetting to total both sides of the ledger account, which hides arithmetic slips.
• Adding all four adjustments to profit with the same sign instead of checking whether each increases or decreases profit.
• Listing the items under non-current headings.
• Giving a numerical answer with no working, so that an arithmetic slip leaves nothing to reward.

Next steps

Move on to the practice questions, then use the diagnostics to find other gaps.

Frequently asked questions

What does the accruals concept require? Each item of income or expense is placed in the year it relates to, whatever the date the cash is paid or received. This is why year-end adjustments for other payables, other receivables, income due and income received in advance are needed.

How do you calculate an expense when amounts are owing? Expense = cash paid − amount owing at the start + amount owing at the end. For example, gas paid of 2,150 with 180 owing at the start and 240 at the end gives a charge of 2,210.

What is the difference between other receivables and income due? Other receivables are expenses paid early, while income due is income earned but not yet received. Both are current assets, shown as separate lines.

What is the difference between other payables and trade payables? Other payables are for expenses such as electricity or wages, while trade payables are owed to suppliers of goods for resale.

Is income received in advance income for the year? No. Income received in advance is a current liability, because the business has taken money before giving the service. Treating it as an asset or as this year’s income is a common mistake.

Official syllabus

OxfordAQA International GCSE Accounting (9215) specification, version 1.2, for teaching from September 2024 and exams from May/June 2026, published by OxfordAQA. Subject content section 3.3 (Development of the accounting model), with the related list in section 3.4.