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Accrued Accounts Payable and VAT Taxes

Can someone take a look at the below explanations and let me know if I need to change how it is worded? Please make any suggestions you deemed as necessary.


1 - "Decrease In the accrued Accounts Payable (A/P) account is due to larger A/P accrual in December 2008 of $2.0M vs. A/P accrual in May 2009 of $1.8M; larger accrual for Legal invoices in December 2008 of $0.8M vs. accrual for Legal invoices in May 2009 of $0.5M; a Facilities Manageent accrual of $0.1M at year end; and an accrual for Telephone charges of $0.1M at year end that is now booked to account 22203990. The remaining $0.3M is related to other monthly accruals."

2 - "Increase in VAT Taxes is driven by an entry in March to record VAT related to sale of Fixed Assets of $0.5M from Westin SRL (6807) to Turistica (6810). The other side of the entry was posted to 6807 as a VAT payable in account 23504030."

Solution Preview

Dear student,

"There is reduction in Accounts Payable (A/P) in the year 2009 from the previous financial year 2008. The decrease in accounts payable is due to high amount of Accounts Payable in the year 2008 (i.e., $2.0M) as against the ...

Solution Summary

The answer contains the correct presentation for explanation for decrease in accounts payable and increase in VAT to the management.