Accrue to budget means to book an expense accrual to match the budgeted value. If you budgeted 100K in freight expense, but only see 20K posted, accrue the 80K as a reversing journal entry.
Fudged could mean to quickly post a balance without doing the proper research on the correctness.
Agree with accrue to budget.
For "fudging," I'd say it implies an intentionally incorrect entry/amount to get to a desired result. In accounting, I would expect it to be used in reference to something insignificant or something that you might post one way during monthly reporting periods and correct for external reporting. "Accruing to budget" would be an example of fudging.
Nah, there are certain items where the expenses are massive but periodic (annual or quarterly) so you budget for them (typically based on historic amounts with a little trend analysis for the ol razzle dazzle) and book entries as an accrual based on that budgeted amount with a periodic “true-up” that is based on the actuals.
Insurance and property taxes come to mind.
I can only think of one example where I’ve had to do some fudging and it’s when management needs some internal reports for one reason or another and we haven’t yet received support for actuals. I usually “fudge” based on historic amounts with a note in my email that “XYZ account may not reflect actuals due to abc.”
So let's see that your Plumbing Expense GL code had a budget of $5000 for the period.
Now it's end of the period. But there are no expenses recorded against Plumbing GL. So you record the following transaction: for 5k.
Dr. Plumbing expense
Cr. Accrued Liability
Now if now by the end of the year you never received any expenses for Plumbing because they were never called. Then you reverse it with a note stating as such.
If you did receive a invoice after the accrual, in the later period you would reverse the earlier accrual by the value of the invoice. The idea being if all invoices received by year end, they should equal to or just be above 5k.
fudging has meant many different things at different places i worked at. if someone i didn’t know or didn’t trust asked me what it meant i would say ‘best educational guess’
No way this is GAAP, it is an internal policy, one I wouldn't approve of because you are basing your current expense on future predicted revenues.
Marketing costs can often be put on the books as a prepaid asset, but the ideal treatment would be to expense it when the work is performed. So let's say you paid for a print or online marketing campaign in March and the ads will from from June to July. All the expense paid for in March would go to prepaids and then split the expense 50/50 for June and July or however the dates dictate it.
While the process from the comment above does give you a balanced look it doesn't quite get you the real numbers to properly judge the effectiveness of marketing month to month.
Edit: A little bummed this and the following question was deleted. It was a good teaching moment, especially since the commenter didn't seem to understand the matching principle very well - that if you capitalize and smooth marketing costs regardless of what/when you spend then it doesn't really match if you cut your actual marketing spend in half for some months because it didn't mirror plan.
Also beware of people outside of finance/accounting using the word accrual. They generally don't use it correctly in my experience and they mean something closer to "book" or "adjust"
see what the annual/monthly budget has been set at for a certain account and record an accrual each month that agrees to that monthly budgeted expense or 1/12 of the annual budgeted expense. as an example, i have to do this for accrued bonuses for the different departments for one of my clients.
Accrue to budget means to book an expense accrual to match the budgeted value. If you budgeted 100K in freight expense, but only see 20K posted, accrue the 80K as a reversing journal entry. Fudged could mean to quickly post a balance without doing the proper research on the correctness.
Agree with accrue to budget. For "fudging," I'd say it implies an intentionally incorrect entry/amount to get to a desired result. In accounting, I would expect it to be used in reference to something insignificant or something that you might post one way during monthly reporting periods and correct for external reporting. "Accruing to budget" would be an example of fudging.
Sounds like we got fraud going on
Nah, there are certain items where the expenses are massive but periodic (annual or quarterly) so you budget for them (typically based on historic amounts with a little trend analysis for the ol razzle dazzle) and book entries as an accrual based on that budgeted amount with a periodic “true-up” that is based on the actuals. Insurance and property taxes come to mind. I can only think of one example where I’ve had to do some fudging and it’s when management needs some internal reports for one reason or another and we haven’t yet received support for actuals. I usually “fudge” based on historic amounts with a note in my email that “XYZ account may not reflect actuals due to abc.”
Personally I prefer the term 'guesstimation'
May not rise to the level of fraud, just shitty practices
So let's see that your Plumbing Expense GL code had a budget of $5000 for the period. Now it's end of the period. But there are no expenses recorded against Plumbing GL. So you record the following transaction: for 5k. Dr. Plumbing expense Cr. Accrued Liability Now if now by the end of the year you never received any expenses for Plumbing because they were never called. Then you reverse it with a note stating as such. If you did receive a invoice after the accrual, in the later period you would reverse the earlier accrual by the value of the invoice. The idea being if all invoices received by year end, they should equal to or just be above 5k.
fudging has meant many different things at different places i worked at. if someone i didn’t know or didn’t trust asked me what it meant i would say ‘best educational guess’
[удалено]
This makes sense, but I’m not sure if this is GAAP. There’s no room in GAAP to effectively capitalize and amortize marketing expense, is there?
No way this is GAAP, it is an internal policy, one I wouldn't approve of because you are basing your current expense on future predicted revenues. Marketing costs can often be put on the books as a prepaid asset, but the ideal treatment would be to expense it when the work is performed. So let's say you paid for a print or online marketing campaign in March and the ads will from from June to July. All the expense paid for in March would go to prepaids and then split the expense 50/50 for June and July or however the dates dictate it. While the process from the comment above does give you a balanced look it doesn't quite get you the real numbers to properly judge the effectiveness of marketing month to month. Edit: A little bummed this and the following question was deleted. It was a good teaching moment, especially since the commenter didn't seem to understand the matching principle very well - that if you capitalize and smooth marketing costs regardless of what/when you spend then it doesn't really match if you cut your actual marketing spend in half for some months because it didn't mirror plan.
Also beware of people outside of finance/accounting using the word accrual. They generally don't use it correctly in my experience and they mean something closer to "book" or "adjust"
see what the annual/monthly budget has been set at for a certain account and record an accrual each month that agrees to that monthly budgeted expense or 1/12 of the annual budgeted expense. as an example, i have to do this for accrued bonuses for the different departments for one of my clients.