a prepaid expense can best be described as an amount

The income tax expense for the year is the total amount based on the taxable income for the entire year. D. Not paid and currently matched with earnings. c. $160,000. A prepaid expense can best be described as an amount. Expenses Paid by Tenant. Prepaid rent expense exists as an asset account that indicates the amount of rent a company has paid in advance. Because the advance payment is for a future expense that has not occurred, it is classified as a current asset on the balance sheet of a business. The expensing is usually done over the term of the insurance coverage or rent on a straight-line basis. 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. An accrued expense can best be described as an amount An accrued expense can best be described as an amount. The following procedure shows a consistent way of charging these items to expense.. $118,000. While accrued … b.not paid and not currently matched with earnings. b. paid and not currently matched with revenues. The asset ledger is the portion of a company's accounting records that detail the journal entries relating only to the asset section of the balance sheet. paid and currently matched with earnings.B. When the insurance coverage starts or the rent period begins, the company will start expensing the prepaid amount. 5) A prepaid expense can best be described as an amount: A. 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). A.) Accrued Expenses are when an expense has been incurred but has not been entered into the books. Not Paid And Currently Matched With Earnings B.) Create a check for the vendor. After the benefits of the assets are realized over time, the amount is then recorded as an expense. Prepaying for a funeral may lead to … A. paid and currently matched with earnings. ... 48. Companies make prepayments for goods or services such as leased office equipment or insurance coverage that provide continual benefits over time. The general rules for prepaid expenses (and income) and for accrued expenses (and income) are listed below for Cash Basis taxpayers and then for Accrual Basis taxpayers. 1 decade ago. Examples of Two Methods for Recording Prepaid Expenses. D. paid and not currently matched with earnings. Prepaid insurance payments are made in advance for insurance services and coverage. An accrued expense can best be described as an amount . c. not … Favorite Answer. In other words, prepaid expenses are expenditures paid in one accounting period, but will not be recognized until a later accounting period. This can create an accounting entry on the balance sheet known as a prepaid expense or deferred expense. If all else fails, use a best guess, this is planning not accounting. Your new spouse's earned income for the year was $2,000. B. generally accepted accounting principles. Therefore, insurance and rent expenses relate to future periods, and thus, they are called prepaid expenses. C. Not paid and not currently matched with earnings. At the end of the year, the company calculated what the insurance expense … Each month, the firm would deduct $2,000 from its prepaid expenses on the balance sheet, transferring the amount to a monthly rent expense line on the income statement.By the end of the year, the full $24,000 would show as various expenses on the income statement, and there would be $0 left in the prepaid expense asset account shown in the current asset section of the balance sheet. Liabilities can be best described as:A. 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. As you use the item, decrease the value of the asset. not paid and currently matched … prepaid expense. Note that all prepaid funeral contracts can be negotiated, even if they are described as “standard”. C)not paid and currently matched with revenues. To reclassify an amount often means to move an amount from one general ledger account to another general ledger account. "Wiley GAAP 2017: Interpretation and Application of Generally Accepted Accounting Principles." We also reference original research from other reputable publishers where appropriate. An accrued expense is an accounting expense that is recognized in the books but has not yet been paid. Can expenses be negotiated with selectees in an effort to limit costs? b. paid and not currently matched with revenues. A prepaid expense can best be described as an amount A)paid and currently matched with revenues. This is common if employees worked during the last week of the year but won’t be paid until the regular payday which is in the next year. Paid and currently matched with earnings. c. not paid and currently matched with revenues. For example, assume ABC Company purchases insurance for the upcoming 12 month period. The value of the asset is then replaced with an actual expense recorded on the income statement. Relevance. Assume that on Jan. 5 a company that designs and manufactures t-shirts purchases a 12-month maintenance agreement for … D. cash expense. For example, if the company pays $1,200 for 12 months of insurance, the prepaid insurance asset account is reduced by $100 every month, and the insurance expense account is increased by $100. Go to the Banking menu, then select Write Checks. deferred expense: A deferred expense or prepayment, prepaid expense, is an asset representing cash paid out to a counterpart for goods or services to be received in a later accounting period. If you use the accrual method of accounting, you are able to recognize the expense in the month that it was performed, December, so you can deduct the $1,750 expense for 2019, even though it … D)not paid and not currently matched with revenues. Just be sure to make sure all variations are signed and in writing. B)paid and not currently matched with earnings. A cash basis taxpayer should take action to immediately pay any entertainment expense invoices and expense reports during 2017. Revenue on the amount is paid this method consist on the books but has yet! $ 10,000 a month twelve months pays any of your expenses, the business will something... 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