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Saturday 19 March 2011

JOURNAL ENTRIES FOR PREPAID EXPENSES

Prepaid expenses or expenses paid in advance: the expenses paid during the current period, but related to next trading period fall in this category.

Making payment of prepaid expenses:
Date Particulars LF Dr. Rs. Cr. Rs.
Prepaid expenses A/c … Dr.
To Cash / Bank A/c
(Being prepaid expenses paid)
Transfer of prepaid expenses to expenses A/c.
Date Particulars LF Dr. Rs. Cr. Rs.
Expenses a/c … Dr.
To Prepaid expenses A/c.

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