According to matching principle, we make provision for the expenditures which haven't been billed by our suppliers or the firm has not paid out the expenses, in the event the underlying services are performed within the corresponding period. Instance for accrued expense, include things like:
1. Accruals for rental2. Accruals for audit costs, tax agent costs
3. Accruals for Payroll, Bonus & CPF
Accounting for Accrual
The corporation can make the accruals based on the agreed quoting from the vendors. The accruals for expense entry:
Debit: Expense ( Profit & Loss)
Credit: Accrulas (Balance Sheet- Liabilities)
Debit: Expense ( Profit & Loss)
Credit: Accrulas (Balance Sheet- Liabilities)
