A copy of the invoice is forwarded to the Accounting Department to create the journal entry to recognize the expense and the liability (accrued expense). Invoices that require an accrual are identified by Disbursement Services when the invoices are processed for payment. In order to properly expense them in the correct fiscal year, an accrual must be booked by a journal entry.
At the end of the fiscal year, many vendor invoices are received in early June for goods and services that were delivered on or before May 31st. AccrualsĮxpenses are recognized throughout the year as the payment is made to the vendor. Journal entries are booked to properly recognize revenue and expense in the correct fiscal year. Deferrals occur when the exchange of cash precedes the delivery of goods and services (prepaid expense & deferred revenue). Accruals occur when the exchange of cash follows the delivery of goods or services (accrued expense & accounts receivable). This results in recognition of accrued expenses, accounts receivables, deferred revenue, and prepaid assets. The year end closing process is used to convert the books from a cash to accrual basis. The accrual basis of accounting recognizes revenues and expenses when the goods and services are delivered regardless of the timing for the exchange of cash. At year end, financial statements are compiled using the “accrual basis” of accounting. The University of San Francisco operates largely on a “cash basis” throughout much of the fiscal year recognizing revenue and expense as cash changes hands. Diversity Engagement & Community Outreach.McGrath Institute for Jesuit Catholic Education.McCarthy Center for Public Service & the Common Good Joan and Ralph Lane Center for Catholic Social Thought & the Ignatian Tradition.Institute for Nonviolence and Social Justice.Center for Research, Artistic, & Scholarly Excellence.Student Conduct, Rights & Responsibilities.Privacy Information for Students (FERPA).Center for Academic & Student Achievement.
International Student & Scholar Services.
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