journal question

[silverxx12]

Hi I think i initially posted this in the wrong heading so reposting here sry


Hi

i have a pnl which is run on as accrual basis - my question is if i have expenditure say in 2012 which relates to 2011 accounts, or for that matter even in same tax yr but just need to show expenditure in Jul which should be accounted for in Jun what journal do i need to enter to shift the pnl to the correct period.

eg say i spend money on a program in Jun and only receive invoices post facto in jul so when i journal the entry i will be cr program fees but im not sure what i should be dr .. can anyone help me plz

tia

 

[Snorbenz]

Hi Tia.

You should debit the expense account (program fees) in the profit and loss account in June and credit the Accruals account in the balance sheet.

When you receive the invoice in July, enter it as normal and then reverse the journal above.

 

[silverxx12]

Hi snorbenz,

i think i understand what you are saying but not sure i was not referring to that scenario.

the scenario you are referring to is a standard accrual when you don't have the invoice plz correct me if i am wrong -

the scenario i have is the following firstly i was not told regarding the expense which was carried out in Jul for the Jun program - hence i did not post the accrual.

when the employee submitted their expense form it came to light that there was extra program fees so now i am in jul but want to show all the expenditure in june pnl should i still do as you have suggested ?

 

[Snorbenz]

If you haven't yet done the June management accounts then, yes, do as I said. If you have completed them I wouldn't worry about just recording the expense in July, unless the year end was June.

 

[silverxx12]

ok great that helps a lot ty would i do the same for income which came in late in jul or if referring to yr end came in jan but really related to dec of previous yr / or in the other example jun of previous month? so i would cr income and dr acrrual?

 

[Triest123]

Hi I think i initially posted this in the wrong heading so reposting here sry


Hi

i have a pnl which is run on as accrual basis - my question is if i have expenditure say in 2012 which relates to 2011 accounts, or for that matter even in same tax yr but just need to show expenditure in Jul which should be accounted for in Jun what journal do i need to enter to shift the pnl to the correct period.

eg say i spend money on a program in Jun and only receive invoices post facto in jul so when i journal the entry i will be cr program fees but im not sure what i should be dr .. can anyone help me plz

tia

=> In practice, if the amount is not material (i.e. do not affect the previous year's profit or loss
significantly), it is not necessary to make "an prior year adjustment".

I don't understand what you said - " i spend money on a program in Jun and only receive invoices post facto in jul"


If you spend money on a program in Jun, what is the entry you made to record the payment
in Jun ???

 

[silverxx12]

What I meant to say was the spending should have been billed in Jun but i only rec'd the bill after the program in jul

sry for the confusion