ICAEW AF · Chapter 8 · Question 7 of 9
At the year end, a business has used £780 of gas for which no invoice has yet been received. What is the double entry to record this?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Debit Gas expense £780, Credit Accruals £780
Explanation
The gas has been consumed in the year, so the expense must be recognised under the accrual basis by debiting gas expense. As no invoice has been received, the liability is recorded as an accrual (credit) rather than in trade payables. The accrual is normally reversed at the start of the next period.
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