Re: Accruals and Expenses owing

echo---pscbro wrote:

I am a French accounting student who is now studying UKGaap
accounting. I have a book which for some applications in the Accruals
concept relates either Accruals or Expenses owing. Is there any
difference between the two?

An accrual isn't technically owing until invoiced.

Further to this, up to now, my understanding of this concept is that
an expense for which we don't have an invoice but we know the amount
(from a yearly contract such as the rent or insurrance fees) has to be
input in the accounting period of its consumption. To my eyes this can
be called an Expense owing.

It is very similar, yes.

Now, if the amount for the expense can't be determined precisely.
Taken for example 500 professional phones and communication contracts.
The subscription fees are the same. However, the amount related to
communication can change (those that exceed the contract) . We assume
it can change consistently. Would that still be an Expense owing or
Accruals or something else.

Your financial year might end on 31st December, and you may be
expecting a two-month electricity bill covering December and January.
Until you get the bill (in February) you won't know exactly how big
the bill is going to be, and therefore how much of it to attribute to
the old year and how much to the new. But you still need to show the
December portion as an accrual.

The trick is to delay finalising the accounts until you do know what the
amount is. In the meantime, if necessary, you can prepare preliminary
accounts in which the accrual figures are only estimated.

.