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joycesyi
joycesyi
January 2, 2019
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How to record travel expenses under accrual method?

  • January 2, 2019
  • 2 replies
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I paid $1700 when booking for hotel and airfare in Nov 2018. But the "actual travel" will not occur until March 2019. My company is C-corp taxed as S-corp. Should I record this travel expense in Nov 2018 or March 2019? How to record it correctly? I'm new to quickbooks online, I really need detailed step by step instructions. Thank you very much.

Best answer by Rustler

create a current asset account called pre-paid travel and use that account as the expense

 

in march do a journal entry, debit travel expense, credit pre-paid travel

2 replies

Rustler
RustlerAnswer
January 2, 2019

create a current asset account called pre-paid travel and use that account as the expense

 

in march do a journal entry, debit travel expense, credit pre-paid travel

joycesyi
joycesyiAuthor
January 3, 2019

Thank you @Rustler . I have another specific question, could you help me figure that out? Thanks. https://quickbooks.intuit.com/community/Reports-and-accounting/How-to-record-invoice-that-I-paid-later-under-accrual-method/m-p/215175#M10141

 

Rustler
Rustler
January 3, 2019
@joycesyi wrote:

Thank you @Rustler . I have another specific question, could you help me figure that out? Thanks. https://quickbooks.intuit.com/community/Reports-and-accounting/How-to-record-invoice-that-I-paid-later-under-accrual-method/m-p/215175#M10141

 

The last piece of help about using the journal entry sounds right/  I don't use simple start at all, and to be honest I doubt if you are taxed as a corporation you should be.

 

If cost is the issue, check desktop, miles ahead of QBO in functionality and pro is ahead of QBO+ too.  One price buy it and use it.

M
Malcolm Ziman
January 3, 2019

Make the allocation for the payment to the vendor Accounts Payable, instead of Travel expense.  This creates a credit for the vendor to be used when you travel. Then create a Bill dated on the travel date and allocate it to Travel expense.  That is the only way that I can see, to be able to run both cash and accrual reports. 

This also creates negative Accounts Payable so to be totally accurate you may need to create a journal entry on 12/31 to debit Prepayments Paid current asset account and credit Accounts Payable and reverse it on 1/1. You CPA may do this if you don't know how

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