Brain work for a tuesday

[boredsenseless]

okay so here is a question to get your heads around.

If I pay for a hotel in December for a stay in January, which date do I use in the accounts for the entry, the purchase date or the date of service? And the receipt will be produced on check-in!

Any thoughts?

And just for spice, the companies year end is smack in between these two events.

[Sockpuppet]

Are you using cash accounting? If not its the date "the benefit is realised".

Wow maybe I did learn something at Uni....

[LordF]

I would do it based on date money was paid.

[Nixon Williams]

okay so here is a question to get your heads around.

If I pay for a hotel in December for a stay in January, which date do I use in the accounts for the entry, the purchase date or the date of service? And the receipt will be produced on check-in!

Any thoughts?

And just for spice, the companies year end is smack in between these two events.

For preparing the Annual Accounts, if the year end was December then the cost would be shown as a prepayment and not included in the calculation of profit for the year.

If you are preparing a VAT return AND on cash accounting then you would reclaim the VAT in the quarter the bill was paid. Most contractors tend to be on the Flat Rate scheme so no reclaim would be made.

Alan