What is entry of prepaid expense?

Question

Accepted Answer

Prepaid expense is an accounting concept where an expense is paid in advance before it is incurred.

Prepaid expense is recorded as an asset on the balance sheet.
It is gradually recognized as an expense over time or as the benefit is received.
Common examples of prepaid expenses include prepaid rent, prepaid insurance, and prepaid subscriptions.
To record the entry of prepaid expense, debit the prepaid expense account and credit the cash or accounts payable account.
As the prepaid expense is used up, it is recognized as an expense by debiting the appropriate expense account and crediting the prepaid expense account.

Accepted Answer

Common examples of prepaid expenses include prepaid rent, prepaid insurance, and prepaid subscriptions.
To record the entry of prepaid expense, debit the prepaid expense account and credit the cash or accounts payable account.

Accepted Answer

By Prepaid expenses dr

To bank a/c cr

Accepted Answer

Debit the prepaid experience and credit the bank account

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