Prepayments
sarahwilson
Registered Posts: 567 Epic contributor 🐘
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?
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?
0
Comments
-
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 to0 -
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!! Thanks0
-
If I did it the longwinded way would I get marked down does anyone know?0
-
Do it however you want, so long as you give the correct answer!0
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