[rekiat.jimoh-salami]

Hi,

Can someone please clarify.
Auditor discovered an accrual for a service that occurred in the balance sheet as of Dec 30 2xx1, upon investigation it was discovered that the Invoice was received Jan 2 2xx2. Should the accrual be released?

[AndreA]

I don't think so, your liability occurred as of Dec 30. Let's say you have AP as of Dec 30, but you received the invoice from the vendor on Jan 2.

[Waffle_House]

When approaching these type of questions remember the matching principal which applies to expense recognition. In this case if the services took place in Dec then you may accrue for this (credit would be some type of liability account hence the balance sheet part). When the invoice shows up in Jan than you can release the accrual. So the answer to this question is yes it should be released.

[Author]

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