[General_Ledger]

I’m a little confused and need to clear my head right now. My question is:

Expense

Your interest expense and expense advance payment (cash or accrual method) have to APPLY to the period that actually incurred or paid right?

Income (for simplicity sake)

Cash method : include in gross income when you have received the payment or constructively received

Accrual: you recognize it when you receive or earn it.

For advance payment, you CAN postpone it till you actually earn it.

EXCEPTION for those; warranty, prepaid rent, book and records advancement. you have to recognize it right away.

Please let me know if i’m wrong or missing anything…

This is what makes me mad about REG, all these darn rules and exception…

FAR 73, 75*, 79! n DONE!
BEC 72, 75
AUD 64, 75
REG 43, 74, 72, 70, 88!
*Expired...FML

HELLO 300 CLUB! 6/8/13

[Justinnnn]

For advance payments, you can generally postpone it until earned, but not beyond the end of the next tax year following the year of receipt. Skim Rev Proc 2004-34 if you can google it.

REG 80 2/7/11
FAR 91 10/8/11
AUD 97 11/22/11
BEC 96 2/4/12

CPA 3/15/13

[Author]

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