USA Accrued expense


Joined
Jun 7, 2019
Messages
1
Reaction score
0
Country
United States
I have a question. If you received notice that your water bill wasnt billed correctly for the months of dec.18-may.19 when you are in the middle of closing May. Vendor has agreed that they will bill you in 3 separate months, June, July and August. Would it be correct to accrue the expense in May? Dr: water Cr: accrued expense for the entire unbilled amount in May. When you receive the actual bill, you will offset it with accrued expense. Wouldn't that be the correct way to record this liability in May? This is realizing the full liability in May isn't it?

Another question: when accruing expenses- do you ever make estimates based on previous months? That is simply your proof or backup for your journal entry isn't it?
 
Last edited:
Ad

Advertisements

kirby

VIP Member
Joined
May 12, 2011
Messages
1,651
Reaction score
222
Country
United States
Yes. Record full liability in May.
Yes. Use previous months’ actual expenses as a basis for current month accrual. In doing so, be aware of seasonal fluctuations.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top