Should the balance in a 401k forfeiture account be a prepaid expense?
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Should the balance in a 401k forfeiture account be a prepaid expense?
Ask yourself is this an asset? will there be a future realisation of this asset?
Yes. I have a similar situation but our tax accountants don't want a gl account for forfeitures. They say we should make a j/e offsetting the 401k expense account. Seems like this would work too? Or is one method better over the other?
I would think it better to consider it a prepaid expense and expense in proper period but I suppose may be missing something
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