Incur in a Sentence 🔉

1. It was impossible to incur any debt after a year of being unemployed.
2. Because she did not pay her taxes on time, the business owner will incur a penalty this tax year.
3. The retiree was able to pull out his funds early, but he did incur a fee when doing so.

To incur is to get or receive — and usually it’s something you brought upon yourself. If you don’t pay your credit card bills on time, you’ll likely incur lots of fees and some serious debt. Generally, when you incur something, that something is undesirable.

Incurred means happened. Accrued means recognized even if no one has been paid yet. Accrued and incurred are, most of the time, actually going to mean the same thing.

A word used by accountants to communicate that an expense has occurred and needs to be recognized on the income statement even though no payment was made.

Accrued salaries refers to the amount of liability remaining at the end of a reporting period for salaries that have been earned by employees but not yet paid to them. The accrued wages account is a liability account, and so appears in the balance sheet.

Accruals are revenues earned or expenses incurred which impact a company’s net income on the income statement, although cash related to the transaction has not yet changed hands. Accruals also affect the balance sheet, as they involve non-cash assets and liabilities.

Usually, an accrued expense journal entry is a debit to an Expense account. The debit entry increases your expenses. You also apply a credit to an Accrued Liabilities account. The credit increases your liabilities.

At the end of each year, we need to make sure that expenses are recorded for all goods or services you have received during the year. In short, accruals allow expenses to be reported when incurred, not paid, and income to be reported when it is earned, not received.

Using accruals, companies record expenses when incurred with or without any cash payments for the expenses. To record an expense in the period in which it is incurred, companies debit the expense account and credit the accounts payable, an account used to track the amount of cash owed by the company to suppliers.

Expense: when services or goods have been received by a company, but for which payment has not yet been made. For example, an account receivable. In other words, a company receives a mobile phone bill in January for a past period (December of the previous year), this would be recorded as an expense accrual.

Reverse an accrual in the accounting period that the expense posts by crediting the expense account for the amount of the payment. Debit the accrual account for the same amount to offset the accrual balance.

Unusually high accruals due to aggressive accounting will maximize current earnings but by necessity will likely result in lower earnings later (assuming no growth) whereas low accruals due to conservative accounting may minimize current earnings but will result in higher earnings later.

Accruals will continue to build up until a corresponding entry is made, which then balances out the amount. By reversing accruals, it means that if there is an accrual error, you don’t have to make adjusting entries because the original entry is canceled when the next accounting period starts.

What is the reversal entry for over accrual? You simply credit the expense account where the accrual was charged to and debit accrued expense. If the accrual was for revenue (unbilled) you would credit that asset account and debit revenue.

Year-end accruals are adjusting entries to make sure revenue and expenses are recorded in the correct fiscal year. A revenue accrual does not need to be made if an accounts receivable entry has already been recorded.

This scenario can arise for an accrual of either revenue or expense. Thus, an under accrual of an expense will result in more profit in the period in which the entry is recorded, while an under accrual of revenue will result in less profit in the period in which the entry is recorded.

The term true up means reconciling or matching two and more than two accounts’ balances. Therefore, the entries made in books of accounts for this purpose are called adjustment entries or true up journal entries. The adjustments are usually made after the end of a financial period once the accounts have been closed.

The True-Up statement is what solar consumers receive after a 12-month billing period with the utility. The True-Up reconciles all the cumulative energy charges and credits and compensation for an entire 12-month period.

True-Up Amount means the difference between the ABO calculated by using the member’s actual creditable service and the actual final average compensation as of the member’s effective date in the FRS Investment Plan and the ABO initially transferred.

The true up calculation compares what the University contributed to what the participant should have received. If the actual total is lower than the projected total, the difference is added to the participant’s account.

With a true-up provision, at year-end the employer makes good on the full promise of the employer’s match, regardless of when employees reached the annual contribution limit.

A true-up contribution allows the employer to contribute the difference into his account.” In another scenario, an employee may defer less than the match rate for the first half of a year, and then defer well above the rate for the last six months.

A Roth 401(k) is a type of 401(k) that allows you to make after-tax contributions and then get tax-free withdrawals when you retire. Traditional 401(k)s, on the other hand, allow pre-tax contributions and the withdrawals in retirement are taxable.

The benefits of having both a 401(k) and Roth IRA. The investment growth for both 401(k)s and Roth IRAs is tax-deferred until retirement. This is a good thing for most participants since people tend to enter into a lower tax bracket once they retire, which can lead to substantial tax savings.

If you’re young and confident that you’ll be earning more and in a higher tax bracket in the future, the Roth 401(k) may be a good choice. Because even if you end up in a lower income tax bracket when you retire, withdrawals from your traditional retirement accounts could potentially kick you into a higher tax bracket.

In many cases, a Roth IRA can be a better choice than a 401(k) retirement plan, as it offers a flexible investment vehicle with greater tax benefits—especially if you think you’ll be in a higher tax bracket later on. Invest in your 401(k) up to the matching limit, then fund a Roth up to the contribution limit.