Quicken & Other Budget/Accounting Software/Budget

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Question
Hi,

In the accounting system, i only captured whatever invoice received and actual payment taken out from the bank. Each year we have allocated budget for each expense and invoice. Unused budget will be burn and are not allowed to carry forward. There is a few invoices for 2014 that we have not receive(and not entered in the system due to this).  

So, how do i enter in the system the amount of the unreceived invoice, so that when i receive the invoices in 2015, i can pay from 2014 allocated budget, not from 2015's budget . And another one, to treat that expense for 2014 although the invoice will be receive in 2015.

Kindly advise all the entries.

Answer
Hi FA ,

Sorry for the delay.

Most accounting systems allow you to enter the invoice and keep it on Accounts
Receivable until paid.  So if your system permits that process, create the invoice
using the original invoice date and be sure to post to the December period.

If not,  you can create an new account called "Accrued Revenue" (other current asset)
Make a journal entry
Debit Accrued Revenue
Credit  Sales (the appropriate income account)

Then reverse that Journal entry on the same date that you enter the actual invoice and payment
in 2015

Debit  Sales (the appropriate income account)
Credit  Accrued Revenue


For expenses incurred in 2014, but the vendor has not sent a bill yet you can
set up an account "Accrued Expenses"  type - other current liability

Create a journal entry dated in 2014 and posted to December
Debit Expense the vendor bill pertains to
Credit Accrued Expenses

When you receive and enter the vendor bill  you will want to reverse the Journal entry
on the same date you enter the vendor bill.

Debit  Accrued Expenses
Credit  Expense the vendor bill pertains to

If you have multiple accrued revenue and accrued expenses you will want to keep a
spreadsheet listing which vendors/customers transactions are being accrued
so that if there is a balance in those accounts in February, you can quickly identify
which transactions have not yet been reversed.

Hope this helps,

Linda Saltz, CPA
Advanced Certified QuickBooks Advisor
http://www.qbalance.com
We sell and support QuickBooks Enterprise  

Quicken & Other Budget/Accounting Software

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Linda Saltz, CPA, QBalance.com

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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

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