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
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Clarification for prepaid expeses - journal enteis
Replies (5)
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 |
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.
Thank You Karan...
Yes. Mr. Rama Chary said Good Way....
Yes, You ll be prepare every month end as payable entry. Then you can prepare payment entry at time of payment.....
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