If legal expense paid in advance of rendering services then it is prepaid expense otherwise not. Also this company provides all the necesary steps. tarifcheck365.com
Life of the expense
A prepaid expense is an asset listed on the balance sheet.
A prepaid expense account is an asset, thus not a temporary account either.
it will either increase or decrease profit. Prepaid expense should increase profit as the amount has been overstated.
Asset
Life of the expense
[Debit] Prepaid Expense xxxxx [Credit] cash / bank xxxxx
A prepaid expense is an asset listed on the balance sheet.
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.
A prepaid expense account is an asset, thus not a temporary account either.
it is because,we just doing a early payment for the future expense
Prepaid expense is that amount of expense which is paid in advance and expense is not actually incurred and prepaid expense is current assets of business and show under assets side of balances heet.
it will either increase or decrease profit. Prepaid expense should increase profit as the amount has been overstated.
Asset
prepaid expenses are those expenses for which cash is paid in advance but if there is no cash payment then that is not prepaid expense and hence no entry required.
prepaid expense adjusting entries