Recording one off cost over the year. Help!!!

EvianBaby | 11:50 Mon 16th Jan 2012 | Business & Finance

2 Answers

I'm having a complete brain fart this morning.

We have an annual membership that's paid as a one off sum. What do I do to record it so that it's broken down across 12 months rather than showing as a large loss in the month we paid the fee?

I know we've done it before, I just can't remember what it's even called or how it's done.

Does that even make any sense to anyone?

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EvianBaby

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Never mind. After pratting around with some general journals I think I've sorted it. I'm sure the accountant will happily let me know if I've stuffed it up.

johne1892

Hi Evian, I know you have the answer but were you thinking of a 'Pre-payment' ? That generally means you have paid for it and want to spread the cost e.g. insurance.

The other way round is an 'Accrual' where you 'save' money to pay something at the end of the year.

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