18 July 2014
Lets take a situation. An XYZ vendor has raised an invoice for Rs. 5000 for internet services provided for period of 1June - 31Aug. Lets assume today we have received bill for payment ie. 18 July. So what will be treatment in books...?
Internet Expenses A/c .....Dr....Rs.2667 Prepaid Expenses A/c.....Dr....Rs.2333 To Bank A/c...Rs. 5000 (Being internet expenses paid for period 1 june to 31Aug)
On 1 Sept we will pass entry. Internet expenses A/c....Dr....Rs.2333 To prepaid expenses
19 July 2014
not getting the calculation, you saying internet charges bill is for 01-06-14 to 31-08-14 that is 5000/-, on the another hand you suppose to post an entry in 1st sep.? when you posting expenses for Jun to aug then where is question of prepaid?
CAclubindia
