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help with accrual and prepayment journals - Part 2

Hi all,

this is about what to book in a prepayment journal.

Does it matter when and if we receive an invoice while preparing a prepayment journal? If I prepay an invoice of 900$ for something I am going to use for the following three months it goes without saying that I allocate 300 on each of the following three months . However if I prepaid something which price could potentially increase the procedure above might or may not be the correct one. And that is where I need your help :-)

If at the end of the quarter I receive an invoice of $1000 before and after month end how should I deal with it ? What should I do with the additional 100$?

Finally, in case I receive an invoice of $800 because the entire service couldn't not be provided, how that would affect my prepayment journal and what should I do to fix that problem?

Many thanks!!


Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

You really need and go back to your Accounting 101 text and re-read these sections.


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