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ReportHi all experts,
I have a question regarding prepayment account issue.
When we issue the 50% prepayment its
1. deposit/prepayment account debit
Cash Credit
When we receive the items
2. Purchases Debit
Accrued Purchases Credit
When we process the invoice
3. Accrued Purchases Debit
Deposit Prepayment Account Credit (50% of which debited in first entry)
Account Payable Credit (balance amount)
So, every things works good uptill the above entry, I am having the trouble with last entry, so instead of debiting Account payable when we pay the balance it is debiting prepayment account again
4. Prepayment Account Debit
Cash Credit
Could you guys please help?
Thank you,
Shoaib
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