Define pre-payments and accruals in simple terms - SS1 Accounting Meaning of Pre- Payments And Accruals & Distinctions Between Pre-Payment And Accruals Question

Pre-payments refer to payments made by a business in advance for goods or services that will be received or consumed in the future, while accruals refer to expenses that a business has incurred but has not yet paid for or revenue that a business has earned but has not yet received payment for.