Record And Allocate Prepaid Expenses In QuickBooks Desktop

The steps provided in this article will help you to Record and allocate Prepaid Expenses. This process can be helpful for you if you have a customer who wants to spread the expense of an item paid in a single amount over a period of few months to distribute expenses to the correct month.

In case, if you are not sure about performing the steps then we can help you out in this. You can contact us at our toll-free QuickBooks Customer Service Number +1805-386-6410 to get assistance for any of your QuickBooks queries.

How To Record and allocate Prepaid Expenses

QuickBooks Desktop for Windows

• Create an account for tracking the prepaid expense. usually, it is an Other Current Asset account.
  • From the main menu, go to Company and select Chart of Accounts.
  • Right-click on the window and click on New.
  • Select Other Account Types from the Choose Account Time window.
  • Select Other Current Asset from the drop-down list and then click on Continue.
  • Provide Account Name and other important information and then click on Save & Close.
• Provide the payment to vendor by using the account you created in the 1^st
• Create a memorized journal entry to distributing one month or quarter of the expense.
  • Go to the Company menu and then select Make General Journal Entries.
  • Provide appropriate date for the first period. You have the option to use your own entry number or you can allow QuickBooks to assign an entry automatically.
  • Debit the Expense account and credit Prepaid Expenses for the percentage of the payment. You can also include a memo in the entry.
  • Press the CTRL + M keys to memorize your transactions. You can assign a name and select Automatically Enter. Select the regularity in which you the entry to get recorded and the date of further transactions. You also have to indicate the number of remaining entries.
  • Click on OK.
• The entries will get recorder according to the frequency that you chose, decreasing the Prepaid Expenses account each period. The balance in the Prepaid Expense account has to be zero when the coverage period ends.
• If you have multiple prepaid expenses to track then we recommend you to create sub-accounts of the Prepaid Expenses account for tracking each account separately.

QuickBooks Desktop for Mac

• Create an account for tracking the prepaid expense. usually, it is an Other Current Asset
  • From the main menu, go to Lists > Chart of Accounts.
  • To create a new account, click on the plus icon (+).
  • Select Other Current Asset from the Type menu in the New Account window.
  • Provide an account number (if used) and name (i.e. Prepaid Expenses).
• Provide the payment to vendor by using the account you created in the 1^st
• Create a memorized journal entry to distributing one month or quarter of the expense.
  • From the main menu, go to Company > Make General Journal Entries.
  • Provide the correct date for the first period. You have the option to use your own entry number or you can allow QuickBooks to assign an entry automatically.
  • Debit the Expense account and credit Prepaid Expenses for the percentage of the payment. You can also include a memo in the entry.
  • Now, navigate to Edit > Memorize General Journal Entry for memorizing the transactions. Provide a name to it and then select Automatically Enter. Choose the regularity in which the entry is recorded and the date of future transactions.
  • Click on OK.
• The entries will get recorder according to the frequency that you chose, decreasing the Prepaid Expenses account each period. The balance in the Prepaid Expense account has to be zero when the coverage period ends.
• If you have multiple prepaid expenses to track then we recommend you to create sub-accounts of the Prepaid Expenses account for tracking each account separately.

Reach Us For Support

The provided steps should allow you to record and allocate the prepaid expenses in QuickBooks in both Windows and Mac operating systems. In case if you are able to perform the steps or you are having some doubts then you can always contact us at our toll-free QuickBooks Tech Support Number +1805-386-6410 and get all your issues resolved in no time.