Quicken & Other Budget/Accounting Software/Invoice


I am actually following up about my your answer yesterday.

So if i were to use January dates for the invoice dated 5 Dec, its better i don't record any journal or accrued expenses first, i straight away treat the Dec invoice as January invoice?

Answer:   Yes, enter the January date.

The journal entries would be something you would do before you close the month.  

My Question : If i straight away treat the Dec invoice as January expenses, do i still need to do journal entries for this invoice expense? if yes why?

If you treat the vendor bill as a January expense, you will NOT need to do any
journal entries.

Some companies, who close their subsidiary ledgers (A/R and A/P and checking)  a
few days after the end of the month, will analyze what has come into the company
to be paid AFTER the close. They total up all the expenses that should be posted
to the prior month, and make a reversing Journal entry (credit the liability accrued expenses)in the general ledger on the last day of the prior month. They also create an exact opposite Journal Entry on the first day of the next month to reduce the accrued liability (because
the bill was received it becomes an a/p and is no longer an accrued liability) account for those expenses

For example
Lets assume a telephone bill came in for $100 in Jan for December, but December was closed
YOu would post the bill in January

Some companies would then take that telephone bill and do the following 2 journal entries
Debit telephone expense $100
Credit accrued expenses  $100 (liability)
Debit accrued expenses  $100 (liability)
Credit telephone expense $100

The result, In the January general ledger, we have your actual bill posting
to telephone expense of $100
And the 1/1/ journal entry for -$100 posting to telephone expense
For a grand total of  -0- expense in January for that telephone bill.

Small companies do not bother with accruing and reversing entries. Instead they
dont close the prior month until most of the major expenses have come into the office
and they just post them in the month the expense was incurred.  Some accounting software
will allow you to enter a bill on the date received but send that expense back to any
posting period you want.  However,  at some point you don't do this because you don't
want your profit & loss and balance sheet balances to continuously change

Hope this helps,

Linda Saltz, CPA
Advanced Certified QuickBooks Advisor

Quicken & Other Budget/Accounting Software

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Linda Saltz, CPA, QBalance.com


QuickBooks best practices, troubleshooting, accounting, tax We have over 70 pages of website content about QuickBooks tips, running a business, tax and business startup at http://www.qbalance.com


Accountant and CPA over 20 years. Specializing in accounting software for over 12 years, Certified QuickBooks Pro Advisor, QuickBooks seminar instructor since 1997.
Producer of www.QBalance.com over 100 pages devoted to QuickBooks help and support and training for small business owners in tax and accounting issues.

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