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prepaid expense ,how to treat in profit & loss a/c
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Answer / sreedhaam
If prepaid expenses are given in the trial balance they are
recorded in the assets side of Balance sheet only. But if
they are given in the adjustments they are subtracted from
concerned expenses in the debit side of profit and loss
account and again are shown in the assets side of Balance
Sheet.
| Is This Answer Correct ? | 60 Yes | 3 No |
Answer / sampada
We deduct from respective expenses value in P & l A/c
| Is This Answer Correct ? | 38 Yes | 12 No |
Answer / sushil27284
No prepaid expenses will not touch the profit & loss A/c if this will appear in trail balance, but if this prepaid expenses is additional information related to any expenses head then the said prepaid expenses amount will be less from the related expenses head from profit & loss A/c
| Is This Answer Correct ? | 8 Yes | 1 No |
Answer / i.c. maurya
the prepaid exp. directly not charged from P/L A/c At the
time of payment we should pass the entry
Dr. prepaid exp
Cr. cash/bank
(being prepaid exp. paid)
when exp. exactly Due we pass the entry
Dr. exp.
Cr prepaid exp.
(being prepaid exp. due and reversed)
this entry effect the P/L(reduce) A/c
| Is This Answer Correct ? | 17 Yes | 11 No |
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