October 30, 2016 admin

Accrued Audit/Tax

Liabilities and Net Worth

ACCRUED AUDIT/TAX LIABILITY ACCOUNT
2428

ACCOUNT EXPLANATION
Estimated cost of year-end audit/tax services performed by dealership’s independent Certified Public Accountant (CPA).
TRANSACTIONS
  Jrnl. Dr. Cr.
  Monthly accrual of estimated annual cost SE
    Professional & Service Fees 8660
      Accrued Audit/Tax 2428
             
  Payment for year-end audit/tax services CD
    Accrued Audit/Tax 2428
      Cash in Bank—General 1001
COMMENTS
  • The estimated cost of the annual audit/tax service is to be accrued in equal monthly amounts during the year for which the service is to be performed. If the estimated cost is revised during the year, the monthly accrual amount should be adjusted accordingly.
  • Differences between the estimated amount and the actual cost should be entered as a CPA audit adjustment at the time of the year-end audit.
  • Subsidiary records should support this account.