Year-end accrued expenses

QuickBooks Help QuestionsYear-end accrued expenses
Karen asked 3 years ago

We are a cash basis business but need to track multiple accrued expenses at the year-end, what should be the debit account if I credit an Accrued Expenses Liability account on Balance Sheet?

admin Staff replied 3 years ago

What are you accruing for? The debit account for accrued expenses should be relevant expenses.

For example, You’ve bi-weekly payroll and paid through 12/24/2017, and remaining unpaid seven days of December 2017, you want to accrue for payroll expenses. These payroll expenses are costs that are incurred in the current period but not paid for until the next period. In other words, employees have already worked but haven’t been paid for or recorded yet. This is why an accrual is recorded as a liability on the Balance Sheet at the end of a period. It’s the amount owed to a vendor or employees. It’s possible you do not have the exact payroll amount, in that case, you can do the best guestimate based on some historical data.

A typical journal entry for this accrual looks like:

Debit Payroll Expense – $1,000
Credit Accrued Expenses (as Liability on the Balance Sheet) – $1,000

You can reverse this on the 1st day of next period or when actually paid or recorded actual payroll expenses.

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