Your books say $180,000 profit. Reality says $135,000. 😬
Episode on accrual expenses 👇
The case: A small trading company came to us at year-end. Their profit looked great, but they had only recorded bills they had already paid.
What was missing:
✅ Audit fee: work done in December, invoice not yet received ($20,000)
✅ Utilities: December usage, bill arrives in January ($10,000)
✅ December salaries: paid in January ($15,000)
That is $45,000 of expenses that belong to this year but never touched the bank account, so they never hit the P&L.
The fix:
Dr Expenses $45,000
Cr Accrued liabilities $45,000
The lesson: Accrual accounting records an expense when you incur it, not when you pay it. If you only look at your bank, your profit is overstated, your tax is wrong, and your decisions are built on a number that isn’t real.
💬 Comment “ACCRUAL” and I’ll send you a simple month-end accruals checklist.
Follow for the next contra episode 🎬
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#Accounting #AccrualAccounting #AccrualExpenses #Bookkeeping #AccountingTips #FinancialLiteracy #SmallBusiness #Entrepreneur #Startup #Founders #Finance #CFO #Accountant #ACCA #LearnAccounting #BusinessTips #AccountingCaseStudy #contra #CountingCrux
0 likes · 3 views · Oct 26, 2026
Your books say $180,000 profit. Reality says $135,000. 😬 Episode on accrual expenses 👇 The case: A small trading company came to us at year-end. Their prof...
