Hello sir,
I hope you are well.
I am a little bit puzzled as to which book of prime entry could we note the prepayments, to the cashbook, as cash is involved or to the journal as a non-usial transaction? Thank you in advance
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Prepayment book of prime entry
6y ago#1When payment is made (whether or not there is anything prepaid) then the amount of the payment is recorded in the cash book.
At the end of the year we examine all the expense accounts to see if there has been a prepayment (or whether there is need for an accrual) and the entries we make for the prepayments and accruals are noted in the journal (along with the other year-end adjustments such as depreciation).
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