Question 3.A.8: How will the eventual payment of the outstanding sales commi...

How will the eventual payment of the outstanding sales commission (Example 3.4) and the electricity bill for the last quarter (Example 3.5) be dealt with in the accounting records of Domestic Ltd?

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When these amounts are eventually paid, they will be dealt with as follows:

■   reduce cash by the amounts paid;
■   reduce the amount of the accrued expense as shown on the statement of financial position by the same amounts.

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