why Prepaid Expense is treated as an asset & what will be
its journal entry using golden rules of accounting.
- 4 Answers
- 10062 Views
- I also Faced
- E-Mail Answers
Answer Posted / h.r. sreepada bhagi
Amount paid in advance in an accounting period for a service
to be received in a future accounting period is Prepaid
Advance. Since payee owes money or moneys worth (service) as
on the date of Balance Sheet at the end of that accounting
period, it's an asset.
When payment is made for future expense in advance the
entry is to :-
Debit Prepaid Expenses A/c, and
Credit Bank or Cash A/c.
In the future accounting period to which the expenses
relates, the entry will be :-
Debit Expenses A/c, and
Credit Prepaid Expenses A/c.
| Is This Answer Correct ? | 7 Yes | 2 No |
Post New Answer View All Answers
Why an Expenditure is called Differed?
WHY U HAVE CHOOSE ICWA WHY NOT CA
How Advances to suppliers for purchase of raw materials is to be considered while calculating Drawing Power
How to pass VAT retention entry on computer and Furniture
i have pay to 250000 excise duty so i ask to all how can maintain entry in tally ?
I am working in govt. sec. How to make journal entry in books for Fix Deposit
Explain what is the disadvantage of double entry system?
Tell me what is trial balance in accounting?
what is t code of journal voucher report with amount?
Tell me what are things will not be included in bank reconciliation statement?
Explain me your track record in previous jobs, specifically speaking to any mistakes you may have made. There is little room for error in accounting?
Your grandfather is 75 years old. He has total savings of Rs.80,000. He expects that he live for another 10 years and will like to spend his savings by then. He places his savings into a bank account earning 10 per cent annually. He will draw equal amount each year- the first withdrawal occurring one year from now in such a way that his account balance becomes zero at the end of 10 years. How much will be his annual withdrawal?
In tally when accounts with inventory ,when working in units of measurement under this after creating unit ,if we want to change the unit due to some mistake why does the cursor does not stop in the decimal field? And why the used units do not get deleted in the alter section?
what is the method deposit of wct in Delhi
how many types excise audits and when they are applicable to firm
