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Post Info TOPIC: Accruals Help PLEASE


Guru

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Posts: 625
Date:
Accruals Help PLEASE


Hi

Thank you in advance for your help


Y/E 31st December 2010

I am having trouble working out what to enter as an accrual for this bt invoice;

BT invoice 2nd Jan 2011

Telephone
Usage period 29 Nov - 30 Dec 10
Rental Period 1 Dec - 31 Dec

Usage charge £14.99
Recurring charges £14.99
Less adjustments - (£25.00)
£4.48

Broadband
Usage period 29 Nov - 30 Dec
Rental Period 1 Dec - 31 Dec
Recurring charges £30.95

Plus vat £6.20

Bill total £41.63

I have no idea what this invoice means - so if anybody can help me I would be most grateful.

I need to know what applys to the y/e 31st dec 10 and if I need to account for any uninvoiced accuals (based on this invoice)

Thank you

Rachel






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Rachel

gbm


Guru

Status: Offline
Posts: 896
Date:

Hi Rachel,

The net amount is £35.43; at this level, I don't think I'd bother entering an accrual, as IMHO it is not material in any circumstances. However, if you really want to, the point is that all the charges from BT relate to December but the invoice is technically dated January. Therefore, the accrual would be:

Dr telephone £35.43
Cr accruals £35.43

HTH

__________________

 

Regards,
Nick

Website: www.gbmaccounts.co.uk
Twitter

Factsheet | Starting a Business

 



Guru

Status: Offline
Posts: 625
Date:

Thank you VERY much Nick for your help

__________________

Rachel



Expert

Status: Offline
Posts: 1501
Date:

Hi Rachel

Would agree with Nick and wouldnt adjust as £35 isnt really material whether you include in December or January.

Just post the invoice into January (the tax point month) and will save you the hassle of having to accrue in Dec and reverse the accrual in Jan

MarkS

__________________

Mark Stewart CA

http://stewartaccounting.co.uk/

Providing accounting, bookkeeping, payroll and tax services to small and medium sized businesses across Central Scotland and beyond.

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