Accruals and Payables Explanation
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Modified on: Wed, 27 Apr, 2022 at 7:48 AM
Accruals and Payables
- When vouchers or payroll is expensed in a given fiscal month, but the checks and direct deposits are not dated until the following fiscal month, the payable accounts will have a credit balance at the end of the current fiscal month. They will zero out the following month when the activity for the checks/direct deposits is posted.
Monthly Accruals
- In the examples given, the payable accounts on 6/31/15 have a zero balance. Once the Payroll and Vendor payments are entered and expensed to June on 6/15/15, the trial balance on 6/30/15 shows the payable balances at the end of June. These balances will not zero out until July as the checks are dated on 7/2/15. The trial balance on 7/1/15 shows the payables balances carried over to July. With the checks dated on 7/2/15, the trial balance on 7/2/15 after the checks are posted, shows all payable's balances zeroed out.
- If vendor payments or payroll expense is posted to the same fiscal month as the checks/direct deposits are dated, the payable accounts will all have a zero balance at the end of the month.
End of Year Accruals
- When the Set Beginning Balances process is run based on prior year's ending balances, the difference between revenue and expenditures is added to the beginning balance for the fund balance account. The payables balances simply carry forward as beginning balances.
Example
Trial Balance run on 05/31/2015
| Year 2015: 2014-2015 Fiscal Year |
|---|
|
|
|
Fund 100 - General Fund |
| Account Description Title | B/S | Debit | Credit |
|---|
| Operating Cash | 1-101 | $55,000 | $0.00 |
| Accounts Payable | 1-421 | $0.00 | $0.00 |
| Salaries & Wages Payable | 1-461 | $0.00 | $0.00 |
| Employee Paid Benefits | 1-462 | $0.00 | $0.00 |
| Employer Paid Benefits | 1-463 | $0.00 | $0.00 |
| Fund Balance | 1-762 | $0.00 | $55,000 |
| Expenditure Control | 1-602 | $10,000 | $0.00 |
| Revenue Control | 1-302 | $0.00 | $15,000 |
Activity created on 06/15/2015
| Vouchers entered in Vendor Payments |
|---|
| Account Description Title | B/S | Debit | Credit |
|---|
| Expenditures | 1-602 | $7,000 | |
| Accounts Payable | 1-421 | | $7,000 |
| Account Description Title | B/S | Debit | Credit |
|---|
| Expenditures | 1-602 | $12,000 | |
| Salaries/Benefits Payable | 1-461 | | $9,000 |
| Employee Paid Benefits | 1-462 | | $2,000 |
| Employer Paid Benefits | 1-463 | | $1,000 |
Trial Balance run on 06/30/2015
| Year 2015: 2014-2015 Fiscal Year |
|---|
| Fund 100 - General Fund |
| Account Description Title | B/S | Debit | Credit |
|---|
| Operating Cash | 1-101 | $55,000 | $0.00 |
| Accounts Payable | 1-421 | $0.00 | $7,000 |
| Salaries & Wages Payable | 1-461 | $0.00 | $9,000 |
| Employee Paid Benefits | 1-462 | $0.00 | $2,000 |
| Employer Paid Benefits | 1-463 | $0.00 | $1,000 |
| Fund Balance | 1-762 | $0.00 | $50,000 |
| Expenditure Control | 1-602 | $29,000 | $0.00 |
| Revenue Control | 1-302 | $0.00 | $15,000 |
- Set Beginning Balances based on prior year's ending balances is run at the end of 2015.
Trial Balance run on 07/01/2015
| Year 2016: 2015-2016 Fiscal Year |
|---|
| Fund 100 - General Fund
|
|
|
| Account Description Title | B/S | Debit | Credit |
|---|
| Operating Cash | 1-101 | $55,000 | $0.00 |
| Accounts Payable | 1-421 | $0.00 | $7,000 |
| Salaries & Wages Payable | 1-461 | $0.00 | $9,000 |
| Employee Paid Benefits | 1-462 | $0.00 | $2,000 |
| Employer Paid Benefits | 1-463 | $0.00 | $1,000 |
| Fund Balance | 1-762 | $0.00 | $36,000 |
| Expenditure Control | 1-602 | $0.00 | $0.00 |
| Revenue Control | 1-302 | $0.00 | $0.00 |
Activity created on 07/02/2015
| Clear Checks in Vendor Payments for checks dated on 07/02/2015 |
|---|
| Account Description Title | B/S | Debit | Credit |
|---|
| Accounts Payable | 1-421 | $7,000 | |
| Cash | 1-101 | | $7,000 |
| Clear Checks in Payroll for checks dated 07/02/2015 |
|---|
| Account Description Title | B/S | Debit | Credit |
|---|
| Salaries & Wages Payable | 1-461 | $9,000 | |
| Cash | 1-101 | | $9,000 |
Payroll Vendor Withholding Distribution for checks dated 07/02/2015
| Account Description Title | B/S | Debit | Credit |
|---|
| Employee Paid Benefits | 1-462 | $2,000 | |
| Employer Paid Benefits | 1-463 | $1,000 | |
| Cash | 1-101 | | $3,000 |
Trial Balance on 07/02/2015 after Clear Checks and Vendor W/H Distribution
| Year 2016: 2015-2016 Fiscal Year |
|---|
| Fund 100 - General Fund
|
|
|
| Account Description Title | B/S | Debit | Credit |
|---|
| Operating Cash | 1-101 | $34,000 | $0.00 |
| Accounts Payable | 1-421 | $0.00 | $0.00 |
| Salaries & Wages Payable | 1-461 | $0.00 | $0.00 |
| Employee Paid Benefits | 1-462 | $0.00 | $0.00 |
| Employer Paid Benefits | 1-463 | $0.00 | $0.00 |
| Fund Balance | 1-762 | $0.00 | $34,000 |
| Expenditure Control | 1-602 | $0.00 | $0.00 |
| Revenue Control | 1-302 | $0.00 | $0.00 |
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