October 30, 2016 admin

Accrued Physical Parts Inventory

Liabilities and Net Worth

ACCRUED PHYSICAL PARTS INVENTORY LIABILITY ACCOUNT
2429

ACCOUNT EXPLANATION
Estimated cost of the annual physical inventory of parts and accessories.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Monthly accrual of estimated cost CD
    Professional & Service Fees 8660
      Accrued Physical Parts Inventory 2429
             
  Payment for physical inventory CD
    Accrued Physical Parts Inventory 2429
      Cash in Bank—General 1001
COMMENTS
  • The estimated cost of the annual inventory of parts and accessories 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 adjusted concurrent with payment, if necessary, or at year end, whichever occurs first.
  • Subsidiary records should support this account.