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Additional Details
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bev,,, | What is the meaning of prepaid rent and prepaid insurance? |
it kinda confusing me... |
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mbrcatz
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You pay it up front, BEFORE you use it. So, prepaid rent, you pay 12 months (or however long) BEFORE you move in. Prepaid insurance, you pay the whole policy term, in full, before it takes effect. |
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Tanty
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Meaning you pay it in advance, for the case of rent you haven't move in but you pay it already. And prepaid insurance mean you pay the premium and the expense hasn't incurred yet (accounting term). |
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curmudgeon
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You pay before you move in. |
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crissyll22
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Prepaid Expenses
Amounts that are paid prior to the period they cover. Such expenses often include insurance and rent. Prepaid expenses are not tax deductible until the appropriate period. Rent paid in advance is not tax deductible even by a cash basis taxpayer. See also Economic Performance Rule. |
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fcas80
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I assume you are asking this for an accounting course.
Cash is an asset.
If you take cash and pay rent with it, before the rent is due, then prepaid rent is the asset that you have created. The total of your assets is unchanged.
When the rent becomes due, you decrease the prepaid rent item in your accounting statements, and increase the income statement expense item called rent expense. |
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Angelfood
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Prepaid expenses of any type are considered a liability to the person that receives it. They will have to pay it back if it is not used. If you pay rent monthly and have paid 6 months down, your first month will be rent expense and the other 5 months are prepaid. |
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babamma
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i have nokia mobile. yester day night iam recharging my mobile Rs.30. but i did't get anything. out going calls are not going. what happen my mobile. plez any body has reason. plez tel me. |
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