Journal Entries: At the time of paying Rent: Prepaid rent A/c... Dr Rs.

60000 ($ 1200) To Vendor / Bank A/c Exchange rates will be picked from exchange rate table in OB08 on the basis of posting date. Then every month you will transfer $100 to expense account TCode: FB50 Rent (expense) A/c... Dr TO Prepaid rent A/c

Accruals and Defferals are the period end activities (it may be monthly, quarterly, etc) Accruals and Defferals are used to book the expenses provision and income accruals. Many a times it so happens that the company incurs expenses for which it does have recieved bills from the vendors. So expenses are not booked. According to accrual concept of accounting, all the expenses and income incurred during the period needs to be booked in that period. Hence company provides for such expenses through accrual and defferals. Since these expenses are not the actual expenses (just an provision for expenses), these needs to be reversed so that when bills are recieved, the same can be booked. Same is with income. The same needs to be recognised on accrual concept. TCode for creating accruals and defferals: FBS1 Auto reversal of abve created accruals and defferals: F.81 For monthly Financial Expenses/revenues provisions for the MIS, B/S and P&L SAP has provided the Accrual and Deferals. Instead of creating expenditure/revenues provisions from FB50 and reversal of those manual entries by FB08 in next month SAP has provided Accrual and deferral concept. In this concept we can copy the entries from last month, can also create fast entries at the time of creation of provisional entries and at the time of provisional entries, we have to give the reversal date, and no need to reverse manually. If we run the F.81 monthly, all monthly provisional entries will get reversed that has been defined and that respective dates that has been given at the time of creation of entries will be taken duly by the system automatically. This is part of month end closing procedure.