Pre-Xmas Offer: 20% OFF on CAclubindia Pro Subscription! Code: XMAS20

Clarification for prepaid expeses - journal enteis

A/c entries 340 views 5 replies

M.SATHISHKUMAR

Audit

68 Points Joined August 2010

Hi Friends,

I have doubt reagarding "Prepaid Expenses"

Question

1) Preapaid Insurance of Monthly is Rs 30,000 and please pass the entries for the 12 months. Please clarify my doubt.

Advance Thanks

Sathish

Replies (5)

Karan Batra

Creator: TheProTalks

2325 Points Joined January 2016

Whenever you pay any expense as prepaid it means you are paying it in advance and it will gather you future cash inflows thus till the time actually comes to treat it as an expense, it is categorised to ve an asset.

1	Prepaid expense A/C Dr.	Amount Paid
	To Bank
2	Expense A/C Dr.	Amount Written off as expense on time basis/or usage basis
	To Prepaid expense A/C
3	SPL A/C Dr.	Amount Written off charged in SPL
	To Expense A/C

Rama chary Rachakonda

Master in Accounts & high court Advocate

9572 Points Joined December 2011

The period of the month recording also is important. Debit prepaid expenses at the end of the each month. When the expenses paid is required the exact of date of payment in the voucher/bill etc.