Can I make Accrual entry for future expenses?

This topic has 1 reply, 2 voices, and was last updated 7 years ago by Kim Smith.

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January 14, 2019 at 11:17 am #501681
tinolo1988
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The employee bought a air ticket of $1000 on Nov 2018 for business trip on Jan 2019, and made a claim for it.
the claim hasn’t been settled til 31.dec.2018 as year end date.
I would like to know if I make a journal entry below is correct:
Dr. Prepayment 1000
Cr. Accrual 1000
Thank you very much.
January 15, 2019 at 10:45 am #502022
Kim Smith
Keymaster
- Topics: 138
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That would work. The entries in 2019 would be:
Dr Accrual/Cr Cash when the employee is reimbursed the expense
and
Dr Travel (expense)/Cr Prepayment to recognise the expense in the correct accounting period (2019)
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