Record to record (RTR) entries during an interview:

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.

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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