Accruals Flashcards
1
Q
What is an accrual
A
It is an expense for services that have been used but not yet invoiced to the business.
2
Q
Is an accrual a current asset or liability?
A
Current liability
3
Q
What is the double entry for an accrual?
A
Debit the expense on the income statement
Credit ‘accrual’
4
Q
What will happen on the income statement?
A
It will increase
5
Q
What will happen on the statement of financial position?
A
There will be an additional current liability
6
Q
How to calculate accrual? If told the amount
A
Add the amount to the expense in the trial balance
7
Q
How to calculate accrual if not told the amount?
A
Monthly amount x number of months accrued
Then add to trial balance expense.
