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what is the Entry for Prepaid expenses? which side it come
in balance sheet?
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Answer Posted / soundar
Prepaid expenses means the Amount paid in advance for the
expenses related to subsquent year. Example Insurance
charges for a vehicle from Feb to Jan the entry should be
passed as follows
Insurance charges ( For Feb & Mar ) DR (Expenses head )
Prepaid expenses ( Apr to Jan ) DR (Asset head )
Bank / Cash CR
In the Subsquent year the above entry should be reversed
thro' journal as below
Insurance charges ( Apr to Jan ) DR
Prepaid expenses CR
| Is This Answer Correct ? | 114 Yes | 15 No |
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