In an accrual accounting system, if you purchase and receive $50 worth of chicken on January 31, but will not be billed for the chicken until February 6, and the chicken remains in inventory until used on February 2, what date is the expense for the chicken actually accrued?

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Quizplus · Accepted Answer

The accrual date for the expense of the chicken is February 2 because that is the date the chicken was actually used and consumed, and therefore recognized as an expense in the accounting system. The fact that the invoice was not received until later or that the chicken was in inventory does not change the accrual date.

In an Accrual Accounting System, If You Purchase and Receive