Accrual v Creditor?

[fodigie]

What is the difference between an accrual and a creditor in the Balance Sheet?

 

[md.emdad.huq]

An accrual occurs before a payment or receipt. There are accruals for expenses and for revenues.

Accrued expenses are reported in the current liabilities section of the balance sheet. Accrued expenses reported as current liabilities are the expenses that a company has incurred as of the balance sheet date, but have not yet been recorded or paid. Typical accrued expenses include wages, interest, utilities, repairs, bonuses, and taxes.

Accrued revenues reported on the balance sheet are the amounts earned by the company as of the balance sheet date that have not yet been recorded and the customers have not yet paid the company.


Creditors in a balance sheet, are the companies, people etc... that you owe money to. They could be utilities, materials purchased, or anything that you have not yet paid for, but have received. This is the opposite of Debtors - people that owe you money.

 

[SBlundell]

Company decides to pay you a bonus at the next payroll date. That becomes an accrual in the balance sheet.

At the next payroll date, they process the wages with your bonus included. You then become a creditor - the amount owed has been processed just not yet physically paid.

Generally, however, the distinction between the two is somewhat academic. In both cases the liability incurred has been reflected in the balance sheet one way or the other.