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Accounts are prepared on an 'accruals' basis. The income in the profit and loss account relates to the money received for that year's work done (e.g. season ticket sales relating to that year). If during the year people pay for the next year's season ticket, it doesn't go into income, it goes into creditors instead. The following year, the balance on that account goes into income. It is a timing thing. The obligation in creditors is basically holding deposits for someone for which you haven't yet provided the service.

Posted By: love win or die, Dec 28, 11:43:22