Prepayments

Options
sarahwilson
sarahwilson Registered Posts: 567 Epic contributor 🐘
in AAT Level 4 (Level 8 in Scotland)
Can someone nod or shake their head to this, I think I've got the double entry for a prepayment sorted.

Pay 12k for premises insurance for the year.

Credit bank with 12k for the payment
Debit premises insurance acct (p&L) with 12k

Credit premises insurance acct (p&l) with 12k
debit prepayments (balance sheet) with 12 k

then credit prepayments monthly with 1k
and debit premises insurance with 1k

Anywhere near?

Comments

  • Nich
    Nich Registered Posts: 49 Regular contributor ⭐
    Options
    That looks fine, but instead of doing points 1 and 2, y dont you just:

    Cr Bank
    Dr Prepayments

    then monthly

    Dr Premises
    Cr Prepayments

    It just saves doing more entries than you need to
  • sarahwilson
    sarahwilson Registered Posts: 567 Epic contributor 🐘
    Options
    Yes I suppose it would make more sense to do what you have said, I was just trying to tick off in my head all the bases!! Thanks
  • sarahwilson
    sarahwilson Registered Posts: 567 Epic contributor 🐘
    Options
    If I did it the longwinded way would I get marked down does anyone know?
  • columbia
    columbia Registered Posts: 580 Epic contributor 🐘
    Options
    Do it however you want, so long as you give the correct answer!

Categories

Privacy Policy