Below is the journal entry for prepaid expenses According to the three types of accounts in accounting prepaid expense is a personal account. The perks of such expenses are yet to be utilised in a future period. The answer to certain tax and accounting issues is often highly dependent on the fact situation presented and your overall financial status. Prepaid expenses are those expenses which are paid in advance for a benefit yet to be received. While the concepts discussed herein are intended to help business owners understand general accounting concepts, always speak with a CPA regarding your particular financial situation. Therefore, the information available via this website and courses should not be considered current, complete or exhaustive, nor should you rely on such information for a particular course of conduct for an accounting or tax scenario. Tax and accounting rules and information change regularly. the realization of benefits by the customer). Reliance on any information provided on this site or courses is solely at your own risk. WebThe prepaid expense appears in the current assets section of the balance sheet until full consumption (i.e. Accounting practices, tax laws, and regulations vary from jurisdiction to jurisdiction, so speak with a local accounting professional regarding your business. The content is not intended as advice for a specific accounting situation or as a substitute for professional advice from a licensed CPA. The content provided on and accompanying courses is intended for educational and informational purposes only to help business owners understand general accounting issues.
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