Accountancy Query

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This discussion addresses a common accounting query regarding prepaid expenses appearing with both debit and credit balances in the trial balance. The advice given is to net off these balances. If the net result is still a credit balance, the recommendation is to debit the expense account and credit the prepaid expense account.

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(Querist)
14 September 2021 In the trial balance prepaid expenses are having both debit and credit balance.
How I should treat it for the preparation of financial statements?
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
15 September 2021 Credit balance may be due to reversal. Net it off both balances.
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Arunima Haldar

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Arunima Haldar (Querist)
15 September 2021 And if by doing net I am getting credit balance then what should I do?
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
15 September 2021 Debit this head and credit such expenses head.
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