[Toni]

Thank You very much.

One last question,

Do you have like a specific video but getting to know/ introduction to Computerised/ Software Accounting?

Secondly

If we Accrue for e.g a old telephone bill. but the bill never comes ( we have switched supplier)

How would you Release the accrual? what would be the double entry?

ThankYou Very much :)!

EDIT: I don’t understand this as well OVER ACCURALS

ABC accounting staff estimates that the amount of its phone bill for the month of April will be $5,500 so it will be

Debit Credit
Telephone expense 5,500
Accrued expenses (liability)
5,500

At the beginning of the next month (May), the accounting system generates a reversing entry, which is:

Debit Credit
Accrued expenses (liability)
5,500
Telephone expense
5,500

Finally, later in May, the phone company sends ABC the April phone bill in the amount of $4,250. The invoice is reduced because of a combination of a rate decrease and ABC having fewer land lines in use. The entry is:

Debit Credit
Telephone expense 4,250
Accounts payable
4,250

Thus, ABC initially creates an accrual of $5,500 that exceeds the actual amount of the expense by $1,250. The over accrual creates $1,250 too much expense in April, and $1,250 too little expense in May.

I understand EVERYTHING except that last line 🙁

In April we thought it would be 5500 , but it was only 3250, SO THE I/S WILL Have HIGHER Expense

BUT ??? HOW does that mean it will be little in May????

The T ACCOUNT Will be

Telephone
———————————————————————-
April 5500 [ I/S 5500
_____ [ ______
5500 [ 5500
[
May 4250 [ Revers Accrual 5500

Accrual
———————————————————————————-
April C/f [ Telephone 5500
] bf 5500

May 5500 (revers Accr)
??????? I don’t understand that

[Author]

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