If a new business starts on the 1st january, and it receives telephone bill for 2100 (for jan and feb) on mar 3, what r the entries to be recorded on jan 31 and feb 28. and What r the other entries associated with this…Should we pass any entries at all on jan and feb month ends for an approximate amount of the telephone bill or something like that…pls help
I’m not sure in my considerations. But if you prepare financial statements on 31 December, I would do next entries:
Dr Telephone expenses for jan X
Dr Telephone expenses for feb Y
Cr Payables X+Y
If you prepare financial statements on 28 February, I would also do such entries – as adjustments of events that happened after the period end.
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