Accounting for expenses such as rent, electricity, etc.
Keywords: Accounting for expenses such as rent, electricity, etc.
Such expenses usually don't require tracking payments to its suppliers, and they usually don't include taxes. So accounting of such expenses is very simple. Bob rented a kitchen on Jan 13 with equipment for 1000 USD per month. The document lease is the proof that says that the rent expense will occur on the last day of every month for 1000 USD even unpaid (accrual method).
Accounting of prepaid rent.
Bob prepaid 3000 USD for 3 months and made the accounting entries: