Difference between Prepaid rent and Accrued rent

Finance and Operations/AX User Forum
1

Hi, I need to know the difference between Prepaid expenses and Accrued expenses. Are they both done using Accrual schemes in Ax 2012?

2

FY: 1st April to 31st March

Insurance Expenses for $ 12000 paid on 1st October for 12 months and 6 months are in Current Financial Year and 6 months are in Next Year.

Now while closing accounts 6 months of Insurance Premium amounting to $ 6000 would be reversed and debited to Prepaid Expenses

Accrued Expenses

Company is paying Office Rent and due date is 7th of every month and this belongs to previous month.

Now when monthly closing would be done for previous month the rent would be Debited to Rent account and credit to Accrued expenses

Month is over but rent is not due it will become due on 7th of next month.