AccountingBLOCK - Tax and Accounting Forums

areedy · 06-26-2008, 07:02 AM

Please help with the following problem!

"You are in the process of doing month-end close, and you just received a phone bill (which arrived late) which refers to the accounting period that is being closed. Is any adjusting entry needed?"

Thank you for any help.

ZahiD · 06-26-2008, 03:32 PM

The questionis, did you already accrue the expense in the first place?

For accruing an expense like a phone bill... the following should be done...

Before receiving the phone bill:

Dr. Phone Expense
Cr. Accounts payable

After the bill arrives:

Dr. Accounts payable
Cr. Cash

areedy · 06-27-2008, 05:56 AM

Why do i need to credit cash, if i haven't actually paid the bill yet?

ZahiD · 06-27-2008, 03:50 PM

I mention above that After the bill arrives you

Dr. Accounts payable
Cr. Cash

I assumed that once you get the bill you will pay it... was I wrong?

06-26-2008, 07:02 AM	#1 (permalink)
areedy Status: n00b Join Date: Jun 2008 Posts: 3	Expense discovered after month-end close Please help with the following problem! "You are in the process of doing month-end close, and you just received a phone bill (which arrived late) which refers to the accounting period that is being closed. Is any adjusting entry needed?" Thank you for any help.

06-26-2008, 03:32 PM	#2 (permalink)
ZahiD Status: Owner/Administrator Join Date: Mar 2008 Location: Berkeley, CA Posts: 266 Blog Entries: 7	The questionis, did you already accrue the expense in the first place? For accruing an expense like a phone bill... the following should be done... Before receiving the phone bill: Dr. Phone Expense Cr. Accounts payable After the bill arrives: Dr. Accounts payable Cr. Cash __________________ Zahid H. Lilani, eZeeTax - Bookkeeping \| Payroll \| Tax

06-27-2008, 03:50 PM	#4 (permalink)
ZahiD Status: Owner/Administrator Join Date: Mar 2008 Location: Berkeley, CA Posts: 266 Blog Entries: 7	I mention above that After the bill arrives you Dr. Accounts payable Cr. Cash I assumed that once you get the bill you will pay it... was I wrong? __________________ Zahid H. Lilani, eZeeTax - Bookkeeping \| Payroll \| Tax

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06-27-2008, 05:56 AM	#3 (permalink)
areedy Status: n00b Join Date: Jun 2008 Posts: 3	Why do i need to credit cash, if i haven't actually paid the bill yet?

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