PSA L&P - Bills: How the date of an expense is recorded in an accrual basis accounting system

How the date of an expense is recorded in an accrual basis accounting system

In an accrual system, the invoice date controls when an expense is recognized in the general ledger. So, when a bill is submitted, a journal entry dated on the invoice date is created which debits the expense account and credits accounts payable. In a cash basis accounting system, the expense is recorded on the check date; in this scenario, the journal entry consists of a debit to the expense account and a credit to the cash account.

 

 

 

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