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What is the difference between prepaid expense and advance payment?
Prepaid expense is a payment which relevant to services which expected to delivered in the next accounting period, while advance expense is an expense paid in advance for services expected to delivered in the current accounting period.
What 2 acounts are affected when you pay cash for a telephone bill?
When you pay cash for a telephone bill, two accounts are affected: the Cash account and the Telephone Expense account. The Cash account decreases because you are using cash to make the payment, while the Telephone Expense account increases, reflecting the expense incurred for the telephone service. This transaction demonstrates the outflow of cash and the recognition of an expense in the accounting records.
What happens if you fail to record payment of an expense in accounting?
It would appear as if the payment is still due.
What does to defer the expenditure mean?
To defer the expenditure means to postpone or delay the payment or recognition of a cost or expense to a later date. This can be done for various reasons, such as managing cash flow, aligning expenses with revenue recognition, or taking advantage of tax benefits. By deferring expenditure, a business can maintain liquidity and better manage its financial obligations.
What is the difference between prepaid rent and rent expense?
Prepaid rent is an asset and represents and advance payment for a future benefit Rent expense is an expense and is the expended portion of the rent consumed.
Is a car payment a variable expense or liability?
A car is a variable expense having the following properties: Car payment ( fixed Expense) Maintenance and usage costs (variable) So in total it is a variable expense. A car payment is considered a liability.
Why prepaid expense are not expense?
it is because,we just doing a early payment for the future expense
Which journal entry records payment for supplies?
Debit supplies inventoryCredit cash / bank
What is the difference between prepaid expense and advance payment?
Prepaid expense is a payment which relevant to services which expected to delivered in the next accounting period, while advance expense is an expense paid in advance for services expected to delivered in the current accounting period.
What is the payment for the use of borrowed money?
Payment made for the use of borrowed money is called interest. Interest expense is shown on an income statement as a non-operating expense.
What the difference between prepaid and accrued expense?
A prepaid expense is an expense you pay before you have incurred an obligation to pay it. Paying three months rent in advance is an example. Prepaid expenses are viewed as an asset on the balance sheet which is reduced as the expense is incurred. For example, every month in which rent falls due would be a reduction of your prepaid rent asset and a recognition of an expense equal to the amount of the reduction. Accrued expenses, on the other hand, are essentially the opposite. For example, assume you didn't prepay your rent. As the rent expense is incurred, a liability is created. After you actually make your payment, the liability is reduced by the amount of your payment.
What happens if you fail to record payment of an expense in accounting?
It would appear as if the payment is still due.
What is journal entry for expense payment?
what is the entry for an excess payment from customer
Is a Payment for a vehicle Loan Liability considered an Expense that would show up in my monthly expense report in my Quicken XG 2004?
Yes payment of loan liability is your expense decreasing the liability as well as asset from which you are paying the loan liability.
What are synonyms for expenditure?
spending, payment, expense, outgoings, cost
What is Payment made for the use of borrowed money called?
Payment made for the use of borrowed money is called interest. Interest expense is shown on an income statement as a non-operating expense.
What is a synonym for expense?
cost, charge, expenditure, payment, spending, outlay
