* Accruals Query *

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Alicia
Alicia Registered Posts: 40 Regular contributor ⭐
in General accounting discussion
If i do an accural in Sage accounts and then run the year end process - once im in the new year do i have to reverse the accurals? If so please could you explain why. Just trying to get my head round this!

Thank you xx

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  • mc25
    mc25 Registered Posts: 232 Dedicated contributor 🦉
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    Yes you are right. You have to reverse the accruals. This will make the accounts straight. The reason you may hve posted the accruals is to account for any invoices you haven't received i.e supplier send you goods which you have got but you haven't received your invoice for this goods, so before your do your year end you need to account for this. so you Cr accruals on sage is n/code 2109 then Dr purchases n/code 5000.

    Hope this helps.
  • Alicia
    Alicia Registered Posts: 40 Regular contributor ⭐
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    It does, thank you - do i also have to reverse prepayments as well if i do them as a journal once the year end process is complete?xx
  • Psyche
    Psyche Registered Posts: 187 Dedicated contributor 🦉
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    Yes, those are known as "reversing journals" because once you are in the next period, they are a current cost/income, no longer a prepayment or accrual.

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