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Level 2

How to record travel expenses under accrual method?

I paid $1700 when booking for hotel and airfare in Nov 2018. But the "actual travel" will not occur until March 2019. My company is C-corp taxed as S-corp. Should I record this travel expense in Nov 2018 or March 2019? How to record it correctly? I'm new to quickbooks online, I really need detailed step by step instructions. Thank you very much.

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Best answer 01-02-2019

Accepted Solutions
Level 15

Re: How to record travel expenses under accrual method?

create a current asset account called pre-paid travel and use that account as the expense

 

in march do a journal entry, debit travel expense, credit pre-paid travel

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11 Comments
Level 15

Re: How to record travel expenses under accrual method?

create a current asset account called pre-paid travel and use that account as the expense

 

in march do a journal entry, debit travel expense, credit pre-paid travel

View solution in original post

Level 2

Re: How to record travel expenses under accrual method?

Thank you @Rustler . I have another specific question, could you help me figure that out? Thanks. https://quickbooks.intuit.com/community/Reports-and-accounting/How-to-record-invoice-that-I-paid-lat...

 

Level 10

Re: How to record travel expenses under accrual method?

Make the allocation for the payment to the vendor Accounts Payable, instead of Travel expense.  This creates a credit for the vendor to be used when you travel. Then create a Bill dated on the travel date and allocate it to Travel expense.  That is the only way that I can see, to be able to run both cash and accrual reports. 

This also creates negative Accounts Payable so to be totally accurate you may need to create a journal entry on 12/31 to debit Prepayments Paid current asset account and credit Accounts Payable and reverse it on 1/1. You CPA may do this if you don't know how

Level 15

Re: How to record travel expenses under accrual method?


@joycesyi wrote:

Thank you @Rustler . I have another specific question, could you help me figure that out? Thanks. https://quickbooks.intuit.com/community/Reports-and-accounting/How-to-record-invoice-that-I-paid-lat...

 


The last piece of help about using the journal entry sounds right/  I don't use simple start at all, and to be honest I doubt if you are taxed as a corporation you should be.

 

If cost is the issue, check desktop, miles ahead of QBO in functionality and pro is ahead of QBO+ too.  One price buy it and use it.

Level 2

Re: How to record travel expenses under accrual method?

Thanks. Btw what do you mean by you doubt if I'm taxed as a corporation I should be? I mentioned it's a c-corp taxed as s-corp. Does this sound a problem or anything wrong? Please correct me if I choose anything wrong. 

Level 10

Re: How to record travel expenses under accrual method?


@joycesyi wrote:

it's a c-corp taxed as s-corp


 

never heard of such a thing, neither has Google search 

Level 15

Re: How to record travel expenses under accrual method?

Malcolm you need to work on your google search

https://www.irs.gov/businesses/corporations/filing-requirements-for-filing-status-change

 

and a couple of thousand other links for it too

Level 10

Re: How to record travel expenses under accrual method?

change filing status from a C Corporation to an S Corporation <> (not equal to) a c-corp taxed as s-corp

Level 2

Re: How to record travel expenses under accrual method?

Malcolm, then you’re probably not aware of corporations and its tax options. You can search “C Corp taxes as S Corp”. Change filing status means tax is calculated through a different way by filing form 1120S, not form 1120 to IRS. It’s a huge difference considering of the amount of tax one gonna pay when come to choose c or s. 

 

 

An S corporation, for United States federal income tax purposes, is a closely heldcorporation (or, in some cases, a limited liability company (LLC) or a partnership) that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. In general, S corporations do not pay any income taxes. Instead, the corporation's income or losses are divided among and passed through to its shareholders. The shareholders must then report the income or loss on their own individual income tax returns.

Level 10

Re: How to record travel expenses under accrual method?


@joycesyi wrote:

 Change filing status means tax is calculated through a different way 

 


Change filing status means the corp has changed. It does not mean it is a "C corp taxed as an S corp".  It means it used to be a C corp and is now an S corp

Level 2

Re: How to record travel expenses under accrual method?

... I’m afraid you know nothing about this. Please consult a CPA or business lawyer. Actually you’re on the opposite, Changing filing status doesn’t mean the Corp has changed at all. There is no such thing as “S Corp” in terms of business/company structure. S Corp just means how a company(corporation/LLC/partnership/etc) is taxed under IRS taxation subchapter. No matter I choose my C Corp taxed as S Corp or C Corp, my C Corp will still be a C Corp forever. Actually C Corp just means the same as corporation. People differentiate C and S just in order to know how the corporation is taxed and that’s all. 

 


@Malcolm Ziman wrote:

@joycesyi wrote:

 Change filing status means tax is calculated through a different way 

 


Change filing status means the corp has changed. It does not mean it is a "C corp taxed as an S corp".  It means it used to be a C corp and is now an S corp


 

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