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Accrued expense

  • Member
  • Practice Licence
  • 77 posts
  • # 122644

Hi I hope someone can help. 

Last year end I posted an accrued expense for £300. The accounts were prepared and submitted. However when the supplier invoice came in it was for £325. Should I, at the first of the new accounting year, Dr retained earnings Cr expense? Otherwise there will be an expense of £25 in the new year which would be incorrect?

Many thanks

Mash

  • Fellow PM.Dip
  • Practice Licence
  • 111 posts
  • # 122677

Hi Mash,

Accruals are often estimates.  The extra £25 will therefore be an expense in the new year.

Hope this helps, Fiona

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