Prepayments are payments in advance. If the benefit has been already consumed then it counts as an expense. Otherwise it is an current asset.

Debtors, or 'accounts receivable', arise when a business sells good or services on credit terms. Entities want to benefit from selling goods on credit but also wish to ensure the losses from bad debts are kept to an acceptable minimum. If the number of bad debts is too low, some management may consider that the entities credit policy is too strict! There are two ways to account for bad debts; write them off or make provision for doubtful debts. The latter is based on a percentage of credit sales from prevous years, or evaluating the time the debt has been outstanding. Doubtful debts counts as an expense.

Creditors, or 'accounts payable', are known amounts owed due to credit purchases. Accruals are amounts owing at a point in time, of which the value is not known with any certainty.