Following a physical count, a business has consumable supplies on hand of 350. The accounting records before adjustment show supplies on hand of 500, and an adjusting entry is needed to record the amount of supplies used for the period.
Prepaid rent is an expense which has been paid in advance.
A business has an annual office rent of 12,000 and pays the landlord 3 months in advance on the first day of each quarter. On the 1 April it pays the next quarters rent in advance of 3,000 to cover the months of April, May and June It has a prepaid expense of 3,000.
A prepaid expense is an expense which has been paid in advance.
A business has an annual premises rent of £60,000 and pays the landlord quarterly in advance on the first day of each quarter. On the 1 January it pays the next quarter rent of £15,000 to cover the 3 months of January, February, and March. It has a prepaid expense of £15,000.