Prepaid Expenses would normally have a debit balance.
Prepaid taxes and equipment are asset accounts, so would normally have a debit balance. Rent expense is an expense account, so would normally have a debit balance. Liability, equity, and income accounts normally have credit balances.
Debit.
Prepaid expense is personal account in nature and default normal balance is debit balance and shown under current asset in asset side of balance sheet.
Prepaid insurance is personal nature of account and amount in it is shown as current asset in balance sheet.
balance sheet as a current liability until it's earned, when you transfer the amount earned to revenue.
Prepaid taxes and equipment are asset accounts, so would normally have a debit balance. Rent expense is an expense account, so would normally have a debit balance. Liability, equity, and income accounts normally have credit balances.
Debit.
Prepaid expense is personal account in nature and default normal balance is debit balance and shown under current asset in asset side of balance sheet.
Prepaid insurance is personal nature of account and amount in it is shown as current asset in balance sheet.
balance sheet as a current liability until it's earned, when you transfer the amount earned to revenue.
asset, debit
A liability is what it represents.
Prepaid Income is considered current liability as it represents the advances received from customers on account of work to be performed.
Dr. Prepaid expence (balance sheet) Cr. Expense (income statement) e.g. you have already paid $1200 insurance, but at year end still have six months to go until you have to renew your premium. You would have expensed the full $1200 - now you need to remove the unused (prepaid) portion. Dr. Prepaid expense $600 Cr. Insurance $600
Prepaid insurance is reported on the balance sheet as a
A prepaid expense account is an asset, thus not a temporary account either.
A prepaid expense account is an asset, thus not a temporary account either.