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Accurals and Defferals

The document discusses accruals and deferrals, which are used for recognizing income and expenses when earned or incurred rather than when cash is received or paid. It provides examples of accrual and deferral journal entries and explains the process for entering provision entries, viewing documents, running reversals, and checking ledger balances.

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45 views

Accurals and Defferals

The document discusses accruals and deferrals, which are used for recognizing income and expenses when earned or incurred rather than when cash is received or paid. It provides examples of accrual and deferral journal entries and explains the process for entering provision entries, viewing documents, running reversals, and checking ledger balances.

Uploaded by

Anonymous 7CVuZbInU
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Accurals and deferrals Document

Accurals and deferrals configuration and user manual document.

Meaning of Accurals and deferrals.

Accruals and deferral concept is used for income and expenditure, as this is recognised when it is
earned or incurred and not when cash is received or paid. Suppose rent, electricity etc are supposed
to pay next month but you have received the bills in this current month, in these circumstances you
raise a accural posting to your prepaid accounts. The same with the deferrals, supoose your going to
receive some interest from bank etc, but wanted to account in this current month for financial
statement.

Eg: Step 1: FBS1 (Posting Date: 23-10-2016, Reversal Date: 23th of Every Month)

SALARY A/C Dr 80000

TO SALARY PAYABLE 80000

Step 2: F.81 (This will reverse the above entry on 23-11-2016, bcos reversal date is given as 23th of
every month.

SALARY PAYABLE Dr 80000

TO SALARY A/C 80000


Accurals and deferrals Document

Step : 1

Enter the Provision Entries in FBS1,

Note : Posting key for debit -40

Posting Key for credit -50


Accurals and deferrals Document

Step:2

To view the Document Entry t code FB03.


Accurals and deferrals Document

Step: 3

Run the Reversal Entry in f.81, there are two types of run, one is test run there we can see the error if
any. Second one final run just uncheck the test run box and run. In final run only the reversal document
will be created.
Accurals and deferrals Document

Step: 4

To view the ledger balance for GL account t code FBL3N, the ledger amount will be nullified or adjusted.

Note: Reversal Document type is AB, it will be configured at OBA7.

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