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Record and allocate Prepaid Expenses

Your customer wants to spread the expense of an item paid in a single amount (i.e. insurance premiums, Yellow Page bill, etc.) over a period of several months in order allocate expenses to the appropriate month.

Detailed instructions
  1.  Create an account to track the prepaid expense, generally an ‘other current asset’ account.
  2. Enter payment to vendor using the newly created Prepaid Expenses account on the Expense tab.
  3. Create a memorized journal entry to allocate one month or quarter of the expense.
  4. The entries will record according to the frequency you selected, reducing the Prepaid Expenses account each period.  The balance in the Prepaid Expenses account should be zero at the end of the coverage period.
  5. If the user has multiple prepaids to track, it is suggested that they create sub-accounts of the Prepaid Expenses account in order to track each separately.

 

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KB ID# HOW13250
12/19/2014 11:16:28 PM
PPRDQSSWS404 9102 Pro 2013 b47903