Record to record (RTR) entries during an interview:
Dolly Kumari
US Taxation at QBSS || Ex Accenture(PTP) || B.COM || Finance Professional ||
1. Accruals and Adjusting Entries
At the end of the accounting period, you need to accrue for expenses that have been incurred but not yet recorded (e.g., salaries, utilities, interest).
Dr: Expense Account (e.g., Salaries Expense, Utilities Expense)
Cr: Accrued Liabilities (or Accrued Expenses)
Ex: How would you record an accrual for $5,000 of utility expenses that have been incurred but not yet paid?"
??Dr: Utilities Expense $5,000
??Cr: Accrued Liabilities $5,000
2. Prepaid Expenses
A company pays for an expense in advance, such as insurance or rent.
Dr: Prepaid Expenses (Asset Account)
Cr: Cash or Bank
Ex: How do you record a $12,000 payment for one year of insurance coverage paid in advance?"
??Dr: Prepaid Insurance $12,000
??Cr: Cash $12,000
Adjusting Entry at Month-End: At the end of each month, you need to recognize the portion of the prepaid expense that has been used.
Dr: Insurance Expense
Cr: Prepaid Insurance
3. Depreciation: Recording the periodic depreciation of a fixed asset over its useful life.
Dr: Depreciation Expense
Cr: Accumulated Depreciation
Ex: If a company purchases equipment for $50,000 with a useful life of 5 years, how would you record the annual depreciation?"
??Dr: Depreciation Expense $10,000
??Cr: Accumulated Depreciation $10,000
4. Reversing Entries: At the beginning of a new accounting period, certain accrued or deferred entries are reversed to avoid double counting.
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Dr: Accrued Liabilities (if reversing an expense accrual)
Cr: Expense Account
Ex: Why do we reverse accruals at the start of the next period, and how is it done?"
To avoid double counting expenses or revenues in the next period.
Dr: Accrued Liabilities (the same amount as the original accrual)
??Cr: Expense Account
5. Intercompany Transactions: Recording transactions between two entities within the same corporate group.
For the Selling Entity:
Dr: Intercompany Receivables
??Cr: Revenue
For the Buying Entity:
??Dr: Expense Account
??Cr: Intercompany Payables
Ex: How do you record a $10,000 sale from one subsidiary to another within the same corporate group?"
Selling Entity:
????Dr: Intercompany Receivables $10,000
????Cr: Revenue $10,000
???Buying Entity:
????Dr: Expense $10,000
????Cr: Intercompany Payables $10,000
6. Foreign Currency Transactions: Recording transactions involving foreign currencies and recognizing exchange rate differences.
Initial Transaction:
??Dr: Expense or Asset Account (at the exchange rate on the transaction date)
??Cr: Accounts Payable or Cash (at the exchange rate on the transaction date)
???Exchange Rate Adjustment:
??Dr/Credit: Exchange Gain/Loss
??Dr/Credit: Accounts Payable or Cash
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Student at Institute of Cost and Works Accountants of India - ICWAI
6 个月GREAT JOB
Accountant, US Tax preparer, PTIN Holder, QBO Professional, Financial Analyst, Advanced Excel, Financial Modeling
6 个月Thanks for sharing
SAP FICO CONSULTANT | FINANCIAL ACCOUNTING & CONTROLLING | SAP S4HANA
6 个月Very helpful ma'am Thank you so much for sharing valuable information.
Senior Analyst at Accenture
6 个月Very helpful , Thank you
The Institute of Cost and Management Accountant of India
6 个月Very useful information.thanks for the sharing