Sir m asking about accruals
what r accruals and the accounting treatment of accruals if any?
2. In an interview th second ques was asked to me that
what is a healthy reconciliation
SANCHIT AGARWAL (accounts assistant) (33 Points)
10 June 2013Sir m asking about accruals
what r accruals and the accounting treatment of accruals if any?
2. In an interview th second ques was asked to me that
what is a healthy reconciliation
rahul somani
(Article)
(36 Points)
Replied 10 June 2013
Accrual means to recognize an exp , when we are certain about its occurane rather than on payment basis ... Hope this may help you ...
CA Suraj Lakhotia
(IndigoLearn)
(4898 Points)
Replied 10 June 2013
As per Accrual System of Accounting, Expenses and Income are recognised in the period in which they accrue/relate to (in the period in which they become payable or are receivable) irrespective of the fact whether cash has been received/paid or not.
For instance, If a company has paid Salary Expense for the month of March in the month of April, the salary expenses are recognised in the month of March because they pertain to march even though they are paid in April. (In contrast, Cash system of accounting would have recognised the expenses in April).
The entry for above would be -
Salary Account dr
To Employees Account/ salary Payable Account.
The above entry would be passed in the month of March.
Similar Treatment is given for income accrued but not received.
CA Suraj Lakhotia
(IndigoLearn)
(4898 Points)
Replied 10 June 2013
As per Accrual System of Accounting, Expenses and Income are recognised in the period in which they accrue/relate to (in the period in which they become payable or are receivable) irrespective of the fact whether cash has been received/paid or not.
For instance, If a company has paid Salary Expense for the month of March in the month of April, the salary expenses are recognised in the month of March because they pertain to march even though they are paid in April. (In contrast, Cash system of accounting would have recognised the expenses in April).
The entry for above would be -
Salary Account dr
To Employees Account/ salary Payable Account.
The above entry would be passed in the month of March.
Similar Treatment is given for income accrued but not received.
SANCHIT AGARWAL
(accounts assistant)
(33 Points)
Replied 10 June 2013
| Originally posted by : rahul somani | ||
 |
Accrual means to recognize an exp , when we are certain about its occurane rather than on payment basis ... Hope this may help you ... |
|
thanx a lot sir
CAclubindia
