Expense account requirements depend on whether expenses are distributed by Expense Code or by Office, and whether the firm uses the Cash, Billed, or Accrual accounting method.
Use this reference to determine which expense accounts are required based on the firm’s expense distribution method and accounting method.
Expense distribution by Expense Code
| Accounting method | Required account setup |
|---|---|
| Cash | Enter the Expense Income Account on the Expense Code. |
| Billed | Enter the Expense Income Account on the Expense Code. Enter the Expense Adjustment Account on the Expense Code. Enter the Expense A/R Account on the Office. |
| Accrual | Enter the Expense Income Account on the Expense Code. Enter the Expense Adjustment Account on the Expense Code. Enter the Expense Unbilled Account on the Office. Enter the Expense A/R Account on the Office. |
Expense distribution by Office
| Accounting method | Required account setup | Adjustment handling |
|---|---|---|
| Cash | Enter the Expense Income Account on the Office. | |
| Billed | Enter the Expense Income Account on the Office. Enter the Expense A/R Account on the Office. | The Expense Income Account is credited for adjustments. |
| Accrual | Enter the Expense Income Account on the Office. Enter the Expense Unbilled Account on the Office. Enter the Expense A/R Account on the Office. | The Expense Income Account is credited for adjustments. |
Noncash expense account requirements are determined by the fee accounting method.