prepaid expenses

A/c entries 3394 views 15 replies

Again the materiality concept is supreme.

In case of digital signature exp. - Classify the amount on basis of Time period & those related to next year needs to be classified as prepaid exp. Here, it's certain that benefits will reap in coming years also

In case of Uniform Exp - If it is the strict policy of organization & uniform is changed after every two years, then you can classify the same in current year & prepaid Exp. , otherwise charge the whole amount to P&L A/c.

Replies (15)

Again the materiality concept is supreme.

In case of digital signature exp. - Classify the amount on basis of Time period & those related to next year needs to be classified as prepaid exp. Here, it's certain that benefits will reap in coming years also

In case of Uniform Exp - If it is the strict policy of organization & uniform is changed after every two years, then you can classify the same in current year & prepaid Exp. , otherwise charge the whole amount to P&L A/c.


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