a prepaid expense can best be described as an amount

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A prepaid funeral plan allows you to plan and pay for your funeral services before your death. 1 decade ago. However, this time the company recorded the entire amount of prepaid insurance of $24,000 as insurance expense in the income statement at the time of the premium payment. What amount should Lane report as incentive commission expense for 2007? Paid and not currently matched with earnings. A common example is paying a 6-month insurance premium in December that provides coverage from December 1 through May 31. b. paid and not currently matched with revenues. Your new spouse's earned income for the year was $2,000. A.) D. cash expense. Which would provide conceptual support for the accrual basis of accounting and thus would necessitate the use. 5) A prepaid expense can best be described as an amount: A. The following procedure shows a consistent way of charging these items to expense. B. not paid and not currently matched with earnings. A prepaid expense can best be described as an amount A)paid and currently matched with revenues. 4) A common set of accounting standards and procedures are called A. objectives of financial reporting. Recording an advanced payment made for the lease as an expense in the first month would not adequately match expenses with revenues generated from its use. A final expense policy is purchased from a life insurance company, and the beneficiary can be anyone of your choosing. prepaid expense. b. paid and not currently matched with revenues. The assumption that a business will continue to operate until it can sell its assets to pay its creditors, Generally accepted accounting principle are man – made rules that never change. Your business may not pay 100 percent of its income tax expense during the year; it may owe a small fraction to the IRS at year’s end. $118,000. Adjusting entries for prepaid expenses are necessary to ensure that expenses are recognized in the period in which they are incurred. Little has been written about whether the new law will allow PPP borrowers to deduct the expenses that they paid to receive forgiveness, and many PPP borrowers will not survive if … finance 1) An accrued expense can best be described as an amount A. paid and currently matched with earnings. B. not paid and not currently matched with earnings. Definition of Prepaid Expenses. When a company pays insurance premiums in advance, the insurance coverage relates to a future period. accrued expense : Accrued expense is a liability with an uncertain timing or amount, the reason being no invoice has been received yet. To capitalize is to record a cost/expense on the balance sheet for the purposes of delaying full recognition of the expense. 19. Understand the basic accounting process for pre-paid expenses. Beginning and ending balances of accounts receivable were $28,000 and $36,000, respectively. 2) When an item of revenue is collected and recorded […] In a scenario which the applied deposit to the next bill is less than the total bill, you would have to write an open balance check, which is deposited to the appropriate expense rather than the deposits held by others. The expensing is usually done over the term of the insurance coverage or rent on a straight-line basis. On the balance sheet, prepaid expenses are first recorded as an asset. To reclassify an amount often means to move an amount from one general ledger account to another general ledger account. Prepaid Expenses Example. The amount owed to creditors.D. We will look at two examples of prepaid expenses: Example #1. A common example is paying a 6-month insurance premium in December that provides coverage from December 1 through May 31. A prepaid expense can best be described as an amount. You record the unpaid amount in the income tax payable account. c. not … "Wiley GAAP 2017: Interpretation and Application of Generally Accepted Accounting Principles." Prepaid expenses are initially recorded as assets, but their value is expensed over time onto the income statement. Create a check for the vendor. A prepaid expense can best be described as an amount a paid and currently A prepaid expense can best be described as an amount School St. Paul School Of Professional Studies Prepaid expenses only turn into expenses when you actually use them. When coding supplier invoices for entry into the accounting system, obtain written approval from the assistant controller that a billing should be … generally accepted accounting principles (GAAP), Wiley GAAP 2017: Interpretation and Application of Generally Accepted Accounting Principles. We also reference original research from other reputable publishers where appropriate. Explore answers and all related questions . Once you have completed your signed prepaid funeral contract, make sure you get an original copy and keep it safe (preferably with the original copy of your will). Because the right or benefit attributable to the $10,000 payment extends beyond the end of the tax year following the tax year in …

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