Hi:

I'm a bit confused. We have an Office Gift Accrual set up for Christmas gifts to employees and some clients. We accrue monthly. We pay the bulk of this in December and January. What would the entry be to handle the December payments. Should the accrual be offset?
Thanks-

What accounts is your company using for these transactions?

If company is purchasing gifts and paying by cash then the journal entry is:
Debit Gift Expense(or Similar Account) for the amount.
Credit Cash for the amount.

If the company is transferring funds to a Gift account, then purchasing gifts later then the journal entry is:
Debit Prepaid Gifts(or similar account) for the amount
Credit Cash for the amount

Then when gifts are purchased:
Debit Gift Expense for the amount
Credit Prepaid Gifts for the amount

Based on cash transaction the first answer is correct. Based on non cash Transaction the second entry may be made with one more entry based on the rule of what has been received, and what should be received; what has been paid and what should be pai