Monthly Adjustments

Monthly Financial Reports

Monthly Financial Reports

Are monthly adjustments for payroll, accruals, deferrals, etc... needed?

If we don't do these adjustments at month end, does that mean the financial reports we generate do not really accurately reflect the financial position?

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Take some time to read my article on adjusting entries for my opinion on whether a small business owner should be booking adjusting entries monthly.

(Please note: You will need a Insider's Pass to read the whole article.)

I think your time would be better spent doing the monthly financial review. The review will give you a good idea how accurate your financial statements are.

Comments for Monthly Adjustments

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Jan 08, 2012
Recording 2011 Expense Paid in 2012
by: Anonymous

How do I record an expense in 2011 when it is paid in January 2012? I forgot to reserve cheques for invoices received late and have already written 2012 cheques.

Thank you!

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Year-end Accruals

You want to accrue the entry in 2011 and reverse the entry on January 1, 2012.

Your year-end accrual would be:

DR Appropriate Expense Account (on income statement)
CR Accrued Liabilities (in current liabilities on balance sheet)

Once you've made your accrual and reversed it, you would just process the invoice in the current year (2012).

Make sense?

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