Accrual - What is an example of an accrual?

Q: What is an example of an accrual?

An example of an expense accrual involves employee bonuses that were earned in 2019, but will not be paid until 2020. ... Therefore, prior to issuing the 2019 financial statements, an adjusting journal entry records this accrual with a debit to an expense account and a credit to a liability account.

Answer

Bonuses earned by employees in 2019 but not paid out until 2020 are an example of a cost accrual. Consequently, this accrual is recorded with a debit to an expenditure account and a credit to a liability account in an adjusting journal entry prior to the 2019 financial statements being issued.

Accrual - What is an example of an accrual?

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