For me is not clear how to properly report business expenses in some situations using accrual method of accounting. I will use 5 domain names as an example.
Every year I pay for domain names renewal. Payment date is June 01. Domains valid for 1 year. If I paid on June 01, 2014 $100 for domain renewal and it covers period from 06/01/2014 until 05/31/2015 then how should I report expenses?
a) all 100$ s/b reported as 2014 expenses? Because it's paid in full in 2014?
b) only portion of year 2014 from amount paid can be reported as expenses (7 month == around $58) and the rest should be reported as 2015 tax year income? (100-58=$42 go to 2015?). Because part of domain effective during 2014 year and part of effective period in 2015 year?
Only the expenses that relate to the calendar year for proprietors need be reported. You will end up with a full year of expenses any way as the first year has June to December and the second year has January to June and June to December.