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NEBRASKAFOREVER
Sep 15, 2008, 09:19 PM
What is the effect of the adjusting entry for depreciation expense?

blue but girl
Feb 21, 2010, 10:09 AM
Does the recording of an adjusting entry for depreciation have the same effect as recording an adjusting entry for an accured expense?

antigua
Jul 22, 2011, 09:29 PM
An accrued expense

antigua
Jul 22, 2011, 09:31 PM
A prepaid expense

pready
Jul 23, 2011, 06:32 AM
A prepaid expense is an asset because you have not incurred the expense yet.

For example when you purchase insurance you record the purchase as a prepaid expense because you have not used the insurance yet. You have purchased the insurance to be used later.

As you use the insurance you will have to transfer a portion that is in prepaid expense to your expense account.