Accrual and prepayments

This topic has 1 reply, 2 voices, and was last updated 5 years ago by John Moffat.

Viewing 2 posts - 1 through 2 (of 2 total)

Author

Posts
August 20, 2020 at 7:22 pm #581328
ketki15
Member
- Topics: 60
- Replies: 15
on 1st jan 20×3 a business had a prepaid insurance of 10000. on 1 aug 20×3, it paid, in full the annual insurance invoice of 36000 to cover the twelve months to 31 july 20×4
amount charged to profit and loss for 31dec 20×3?

where should we account 36000?
August 21, 2020 at 9:30 am #581373
John Moffat
Keymaster
- Topics: 57
- Replies: 54857
We credit cash and debit the insurance account. (And then of course we deal with the amount of the prepayment in the way I explain in my free lectures)
Author

Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.