My question is in order to classify as "Prepaid Expenses", do we have to really pay the expenses in advance or an accrual of liability towards is expenses is enough?
For Eg; Suppose the accounting year of a company is calender year. The rent for the period 1-8-2012 to 31-7-2013 has been given by way of Post Dated Cheques (assume 12 cheques). In this case does the rent from 1-1-2013 to 31-7-2013 to be classified as Prepaid expenses?
CAclubindia
