Prepaid Payments & Income
Alpacamom
Member Posts: 4
I have 2 organizations that have prepaid expenses and income that are for the following year events. How and where would I categorize them? IO know I would have to transfer them into the income/expense account on Jan 1 of each year. My guess is a prepaid account but not sure.
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The best way to account for these would be in prepaid accounts as you suggested.
The set up I would recommend is one account under Assets for the vendor prepayments and one account under liabilities for revenue prepayments. If you go into your Chart of Accounts, there are actually sections labelled in there for those particular accounts!
Thank you ErinS. What then, would be the offset for each of these? My books are set up under non-profit organization and their descriptions on some confused me a little.