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 Expenses would normally have a debit balance.
Prepaid expenses are the part of nominal account expenses which are not used during the current accounting period. They cannot be charged to profit and loss account as per matching concept. They find place in balance sheet and written off in the next accounting period.
A prepaid expense account is an asset, thus not a temporary account either.
1.Intial Step when we pay the prepaid Expenses Prepaid Expenses A/c DR Bank A/C CR 2.Later on adjustment in our books Expenses A/c DR Prepaid Expenses A/C CR
NO! Prepaid expenses are assets!!
Yes, prepaid expenses should be a nominal account. Prepaid expenses are not assigned to a particular organization, but rather a category.
Prepaid Expenses would normally have a debit balance.
Prepaid expenses are the part of nominal account expenses which are not used during the current accounting period. They cannot be charged to profit and loss account as per matching concept. They find place in balance sheet and written off in the next accounting period.
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.
1.Intial Step when we pay the prepaid Expenses Prepaid Expenses A/c DR Bank A/C CR 2.Later on adjustment in our books Expenses A/c DR Prepaid Expenses A/C CR
NO! Prepaid expenses are assets!!
1. asset, debit 2. expense, debit 3. revenue, credit 4. liability, credit which one of them???
balance sheet as a current liability until it's earned, when you transfer the amount earned to revenue.
Prepaid insurance is personal nature of account and amount in it is shown as current asset in balance sheet.
A prepaid expense is an account that a business might have to pay the traveling expenses of salesmen. The salesmen are given a certain amount for travel each week or month that can be used for meals and hotels and other travel expenses.
these are those expenses which have been paid in advance. it means that these expenses,though not related to the current year,have been included in the expenses of current year. so in order to show a true and fair view,we have to deduct such prepaid expenses from the original expenditure as they are belonging to the next year. the entry is (for example) prepaid insurance dr to insurance a/c cr