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prepaid expense

Forums › FIA Forums › FA2 Maintaining Financial Records Forums › prepaid expense

  • This topic has 1 reply, 2 voices, and was last updated 8 months ago by Ken Garrett.
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  • July 5, 2020 at 1:45 am #576016
    beticopper
    • Topics: 69
    • Replies: 13
    • ☆☆

    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
    Keymaster
    • Topics: 9
    • Replies: 9050
    • ☆☆☆☆☆

    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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