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Prepaid expense is a debit balance.... Explanation... increase in assets......debited decrease in assets ..........credited increase in liabilities ........credited decrease in liabilities..........debited Prepaids Expenses are current assets since future expenses have been covered. Accordingly, an increase to prepaid expenses is a debit.

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โˆ™ 2009-08-03 21:26:06
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Q: Prepaid expense is debit balance or credit balance in cash flow statement?
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What accounts will normally maintain a credit balance prepaid taxes interest income rent expense equipment?

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.


Is rent expense credit or debit?

As all expenses has debit balance as normal balance and rent is also expense then rent expense also has debit balance and shown in income statement as a reduction from revenue.


Is rent expense debit or credit?

As all expenses has debit balance as normal balance and rent is also expense then rent expense also has debit balance and shown in income statement as a reduction from revenue.


What is the Journal entry for travel expense in advance?

you would label it as a prepaid expense. Debit -prepaid travel expense credit- cash


How do you book a Prepaid Expense?

[Debit] Prepaid Expense xxxxx [Credit] cash / bank xxxxx


The account type and normal balance of prepaid expenses?

1. asset, debit 2. expense, debit 3. revenue, credit 4. liability, credit which one of them???


How is Interest Expense with a credit balance classified in the financial statements?

An Interest Expense with a credit balance is reclassified as Interest Payable on the Balance Sheet.


Can an annual credit card fee be a prepaid expense?

yes


What are the accounting journal entries to record a prepaid expense?

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


A balance of a prepaid expence account is normally DEBIT OR CREdit?

Prepaid Expenses would normally have a debit balance.


Is depreciation allowed a debit or credit?

Depreciation is expense and like all other expense it also has debit balance as default balance and all revenues has credit balance as default balance.


Is an expense a debit or credit?

An Expense would normally have a debit balance.


Is Depreciation Expense is reported on the balance sheet as an addition to the related asset?

No depreciation expense is recorded in the income statement. As you know though every debit needs a corresponding credit so for the amount of the debit to depreciation expense in the income statement there is a corresponding credit to accumulated depreciation in the balance sheet. Which is a reduction of a fixed asset or more of a contra account to the fixed asset account. So you'd have the fixed asset cost, a debit balance, and an accumulated depreciation account, a credit balance. These two accounts when combined represent your net book balance of your fixed assets.


What are the benefits of using a prepaid credit card?

No identification is required to use a prepaid credit card. Only the prepaid limit may be spent when using a prepaid credit card for a purchase, so there is no reisdual balance or finance charges after the purchase.


Is an increase in rent expense a credit?

Rent expense has a debit balance as a normal balance so increase in rent will be shown by debit to rent expense.


What is statement balance on your credit card?

the statement balance is nothing more than the balance of your card at the time the statement was printed.


How is a prepaid expense recorded in accrual accounting?

[Debit] Prepaid Expenses xxxx [Credit] Cash / bank xxxx


The classification and normal balance of the supplies expense account is a or an?

liability with a credit balance


Is a decrease in prepaid rent a debit or a credit?

Prepaid Rent is an asset, therefore to decrease the asset (or use up the rent) a decrease would be a credit. Assets generally maintain a debit balance, which means to increase the balance we debit and to decrease the balance we credit.


Do expense accounts normally have a credit balance?

yes


Is accrued expense a payables account?

If you are doing adjusting entries, an accrued expense will affect a balance sheet account (payable) and an income statement account (expense). Such as accrued interest at the end of year would be: Interest Expense (Debit) Interest Payable (Credit)


is revenue debit and expense credit?

No all revenues has credit balance as default balance while all expenses has debit balance as default normal balance.


What are accrued expenses reported on the balance sheet as?

As you accrue expenses, they show up as a CREDIT on the balance sheet, and a DEBIT on the income statement. Then as you actually incur the expense and pay out, you would CREDIT your cash account, and DEBIT the accrued liability account on the balance sheet. For example, if you expect to spend $12,000/year on business travelling expenses, you would accrue $1000 monthly as a CREDIT to your accrued liability account (on the balance sheet), then a DEBIT to the expense account (on the income statement). When you actually do incur the expense and pay out, you CREDIT your cash account, and DEBIT the accrued liability account. Thus, the accrued liability account is cleared out and eventually washed out to zero.


Is depreciation expense a debit?

All expenses recognized in a period are debits. While depreciation expense is a debit (increase in expense) shown in the income statement, accumulated depreciation is usually the offsetting credit (contra-asset reduction in balance sheet).


Normal balance of an expense account?

All expenses have debit balance which reduces the profit of company and shown under income statement and all revenues are credit account which increases the income of company

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