Hi, I have a question regarding month end, precisely accruals. Example: The previous month period is now close, month end date 25 july. On 30th of the same month while booking the accrual journal i receive two invoices dated 26th July and 10th July. Would I need to accrue for both of the invoices ? Thanks
booking accruals at month end
Answers
I assume the month end close day is purely an example, because it should be the last day of the month.
The technical answer is yes.
The real practical answer is are those two invoices material. If you are $1M business and got two invoices for $50 a piece, I wouldn't bother, but if they were for $5,000 a piece, then yes.
Caveat: Year End. You need to capture everything or make a good faith effort to accrue.
I would add that you need to check that both invoices are for goods or services delivered/used by July 25th, regardless of invoice date.
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Good catch my friend..