I have query about the 950 Cash you have debited under telephone account. I believe this expense was already recorded for previous year telephone expense i.e. 3 months to 31 March 2001 however not paid. This year there should be only reversal for accrual by crediting the cash account for 950. kindly confirm. thanks .!
Although it would end up with the same result, the correct way of dealing with it is as explained in the lecture. Whenever cash is paid the bookkeeper will deal with it in the normal way.
The page 24 of FA notes about (b)Accruals: 1.Reverse any Accruals brought forward: DR Accruals Account CR Expense Account(e.g. Telephnoe,Electricity) I want to know,why the CR is not cash?
John, this is probably a silly question but how would we deal with an issue where the electricity and water expense is combined and appears as one figure yet we are asked to determine electricity accrued. Do we just simply add it to the amount stated?
darocksays says
I have query about the 950 Cash you have debited under telephone account. I believe this expense was already recorded for previous year telephone expense i.e. 3 months to 31 March 2001 however not paid. This year there should be only reversal for accrual by crediting the cash account for 950. kindly confirm. thanks .!
John Moffat says
Although it would end up with the same result, the correct way of dealing with it is as explained in the lecture. Whenever cash is paid the bookkeeper will deal with it in the normal way.
Joanne94 says
Thank you John! You truly are a godsend.?
John Moffat says
Thank you for your comment 馃檪
Bleacheyj says
The page 24 of FA notes about (b)Accruals:
1.Reverse any Accruals brought forward:
DR Accruals Account
CR Expense Account(e.g. Telephnoe,Electricity)
I want to know,why the CR is not cash?
John Moffat says
We credit cash (and debit the expense account) when the cash is actually paid. (Have you watched the whole series of lectures on this topic?)
Joanne94 says
John, this is probably a silly question but how would we deal with an issue where the electricity and water expense is combined and appears as one figure yet we are asked to determine electricity accrued. Do we just simply add it to the amount stated?
Thank you.