[sherlockholmes159]

Hi,everybody

I am studying FAR at this moment, i have a question about the Ninja Notes.

On pages 25 of Ninja FAR

“Accrued liability (Deferred Expense)”

Should it be accrued expense since no cash is involve?

Thank you

BEC (11/02/2013)- 90
AUD (12/06/2013)- 75
FAR (01/04/2014)- 84
REG 69, 74, (waiting for 11/23/14)

[Anonymous]

I haven't seen the FAR ninja notes nor have I started studying for FAR, but I wanted to respond since no one else has. Accrued Liabilities do not involve cash. They are a debit to an expense account because you know you will get a bill, but haven't received it in time to close your books and want the expense to hit the right period. The credit goes to the accrued liability account to show that you will owe that money. When the bill comes in you will debit the accrued liability and credit cash to show you paid the bill and no longer owe that money. If the bill had come in on time you wouldn't accrue anything, you would just debit the expense and credit cash. Does that help?

[Anonymous]

I haven't seen the FAR ninja notes nor have I started studying for FAR, but I wanted to respond since no one else has. Accrued Liabilities do not involve cash. They are a debit to an expense account because you know you will get a bill, but haven't received it in time to close your books and want the expense to hit the right period. The credit goes to the accrued liability account to show that you will owe that money. When the bill comes in you will debit the accrued liability and credit cash to show you paid the bill and no longer owe that money. If the bill had come in on time you wouldn't accrue anything, you would just debit the expense and credit cash. Does that help?

[Anonymous]

accrued liability is a liability incurred but not yet paid. like for december rent that is due in january

[Anonymous]

accrued liability is a liability incurred but not yet paid. like for december rent that is due in january

[sherlockholmes159]

Thanks guy,

I am thinking the same thing.

Good luck on preparing for the test

BEC (11/02/2013)- 90
AUD (12/06/2013)- 75
FAR (01/04/2014)- 84
REG 69, 74, (waiting for 11/23/14)

[sherlockholmes159]

Thanks guy,

I am thinking the same thing.

Good luck on preparing for the test

BEC (11/02/2013)- 90
AUD (12/06/2013)- 75
FAR (01/04/2014)- 84
REG 69, 74, (waiting for 11/23/14)

[Author]

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