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Accounting Entry electricity bill

15 May 2021

|Dear Sir

Please suggest below entry in books of account is correct or wrong.We have received electricity bill. Rs.9400 days 66 bill period 1 March to 5 May 2021.
Entry in books

Electricity exp Dr.4415 up to March
Prepaid electricity Dr. 4985 Current assets
ELECTRICITY payable Cr. 9400

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4 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 15 May 2021

You should seperately pass entries on two dates in March and in April and May

Naveen Kumar (629 Points)
Replied 15 May 2021

As suggested some one entry is correct
in May month entry
Electricity exp 4985/- Dr.
prepaid Electricity 4985/-Cr

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 15 May 2021

In March month balance sheet such rent should be shown as current assets under prepaid expenses. And in April and May you should pass payment entries

Ajay Kumar (Account Supervisor) (129 Points)
Replied 04 June 2021

You can not book in prepaid expenses as the bill date is in next year so you can not book whole bill in March.
however you can crate expenses payable for rs 4985/- to book march expenses only.
and reverses payable account in the month when bill actually received.