Accrual and Reversing

antonio (Student Others) (44 Points)

15 September 2024

Good Evening to All,

I have a interesting question I want to ask on Accruals. Relevant details are as under:

I get Electricity bill from service provider every month dated 05 the of every month that charges relates to previous month. Example bill dt.5-9-2024 and charges relates to 01.08.2024 to 31.08.2024.

Every month of management account I have to accrual for the month of August.

1. How to do the accrual in a precise manner.

2. Also, next question is that we receive credit note on regular basis from electricity service provider if there is any excess billing but this credit note may relates to 3 months back but is dated in current month. Example. Credit Note dated 05.09.2024 but it relates to period of May 2024. The scenarios is that I have account credit note in current month at the same time I have move back credit note expense to the period it relates too.

How to pass necessary entries so that management account relates true and correct picture of profit and loss