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prepaid expense

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

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July 5, 2020 at 1:45 am #576016
beticopper
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does prepaid expense has net effect of 0 on asset side of balance sheet(cash decrease and prepayment increase) and decreases liability and increases capital?
July 5, 2020 at 10:10 am #576037
Ken Garrett
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A prepai expense has been paid so
Dr Expense
Cr Cash.
At the end of the year the prepaid part is calculated and this decreases the expense and increases assets (prepayments).
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