Dear All,
Plz tell me the accounting treatment of prepaid & outstading exp.
Thanks & Regards,
Ajay
2 Replies
CMA.Baskar.V
(Cost Accountant)
(400 Points)
Replied 08 March 2010
hi Ajay,
Accounting treatment of Prepaid Expenses
1. At the time of expenses
Expenses Account - Debit ------------Profit and Loss acccount item
Cash/Bank/Vendor Account Credit
2. At the of Books Closing
Prepaid Expenes A/c - Debit ---------------- Balance Sheet item
Expenses Account Credit ------------------ Profit and Loss account item
Accounting Treatment for Outstanding Expenses
1. At the of Books Closing
Expenses Account Debit ----------------Profit and Loss Account item
Outstanding Expenses Credit ------------Balance Sheet Item
2. At the time actual expenses incurring
Outstanding expenses account Debit ------------Balance Sheet Item
Cash/Bank/Vendor Account Credit
With regards,
CMA.Baskar.V
V.Saravanakumar
(Deputy Manager - Finance )
(24 Points)
Replied 07 April 2011
sir,
i just want to know the accounting treatment for outstanding expenses when its paid to parties at the time of closing books of accounts ie. the expeses should been shown both in parties ledger as same time in related expenses & in outstanding exps
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