Accounting treatment

Dear Rajini,

the prepaid expenses....show as an asset in the balance sheet under current assets and the second effect goes to cash..

at the due date, transfer the prepaid expense a/c to the P&L

income in adv: liability in the balance sheet and the second effect in cash

at the due date, transfer the advance income a/c to the P&L

Thank U Ankit Sir,

plz tell me is it correct....

for income received in advance

due entry

1.

cash account Dr                                       XXX

    To Income Received in advance a/c                 XXX

          (Current Liability)

Transfer entry.

2.

Income received in advance a/c Dr     XXXX

    To Indirect Income a/c                                     XXXX

It is correct..

Thank U  Ankit Sir..................

in second one u shall credit P&L a/c instead of indirect income...

Entry for prepaid expenses :

Debit Prepaid Expense a/c  xxx

Credit Cash a/c                    xxx

And by incurring the acutal expense :

Debit Expense a/c                xxx

Credit Prepaid Expense a/c  xxx

Hello Ranjini

Accounting treatment for prepaid expenses should be:

1. Prepaid Expense a/c            Dr

            To Expense a/c

2. Expense a/c                           Dr

         To Profit And loss a/c

Rent paid in advance.

            Rent a/c dr xxxxxxxxxxxxxx

                          To cash xxxxxxxxx

Adjustment entry:

Prepaid rent a/c dr xxxxxxxxxxx

              To rent a/c xxxxxxxxxxx

At the end :

Rent a/c dr  xxxxxxxxxx

      To pepaid rent a/c xxxxxxxxx

1. Prepaid Exp a/c  DR.

          Cash/ bank    Cr.

2. Exp. a/c     Dr.

           Prepad Exp  Cr.

 For Prepaid Expenses the entry should be as described by Mr. Rakesh Mishra.

1. Prepaid Expenses A/c...............................Dr,

     To, Cash/ Bank .

2. Expenses  A/c.....................................Dr.

      To,Prepaid Expenses.

 

what should be the accounting entries of  ?????

1. buying a credit card

2. expenses through credit card

3. payment of credit card bill along with  int. expenses

I have uploaded on youtube a video on preparation of Journal entries.  You can refer to that video for your all such questions.  I am giving below the link:

https://www.youtube.com/user/jbsclasses

error 404  video not found  :-(

Dear Vardan just copy the link and you will reach there, I tried just now and it worked well.