The company I work for uses accrual accounting and I'm not sure how to close the month for accounts payable because we receive invoices sometimes after the month they incurred. If the invoice date is 05/05/10 and you receive it 06/20/10 and you had no idea someone incured this expense how do you enter it. In June or May?
Dear,
In this case at the end of May you have to make a provision by using best estimate of the amount to be paid against such invoice and creat a accrued expense (Liability). When the actual invoice will be received then you will reverse the accrued expenses and record in payable account. So, an estimated amount will be shown as liability at the end of May.
ya its obvious. you may also revise book pages and consult your boss.