Can we book expenses payable or prepaid exp. In school/ trust accounting?
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Expenses payable
Replies (7)
YES IT PERTAINS IN MATCHING PRINCIPAL OF FINANCIAL ACCOUNTING
Follow mercantile accounting system
Yes, you can if following mercantile system
Method of accounting for an education trust is cash system. You should accounted the expenses and Income when they are paid/ received so there are no journal entries. Receipt & payment account and Income & expenditure account are the final accounts (instead of Trading & Profit Loss account). you should maintain : Cash book Ledger Fees register Salary Register other register as per requirement.
Dear Rama Sir
but how to treat AMC which is from july'21 to June'22 because from july to march is current year exp. & from april to june'22 is for next year. same as telephone exp. which is payable in march but we paid it on april or may?
debit the telelphone charges also as and when you pay
Create an provision account of AMC and book expensive when it will incurred
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