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Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 10110
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Non-profit dissolving this year. Had accrued wages that have

Customer Question

Customer: Non-profit dissolving this year. Had accrued wages that have to be written off. Should I put this as an individual donation?
JA: Thanks. Can you give me any more details about your issue?
Customer: There is no cash to pay the accrued wages. We need to write off the liability. Can we make the offset entry revenue from the individual?
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Submitted: 11 months ago.
Category: Finance
Expert:  Lane replied 11 months ago.

Hi,

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When you reverse an accrual, you debit accrued expenses and credit the expense account to which you recorded the accrual.

..,.

This is just an adjusting entry.

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This is similar to the adjusting entry that needs to be made at closing (year-end)

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At closing, the expense accounts will be reset to a zero balance but your accrued expenses will not. The reason for this is related to the difference between balance sheet accounts and income statement accounts.

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Let me known if you have questions