Apex is on the cash basis of accounting and prepaid an insurance policy in 2019. On...
Apex is on the cash basis of accounting and prepaid an insurance policy in 2019. On 11/1/2019 it pays $ 24,000 on a policy that runs from 11/1/2019 – 10/31/2020. How much will Apex deduct in 2019 and 2020?
Homework Answers
IN CASH BASIS ACCOUNTING WE RECOGNISE EXPENSE WHEN ACTUALLY PAID.
IN GIVEN CASE $ 24000 PAID IN 2019. SO WE DONT RECOGNISED PREPAID EXPENSE.
BECAUSE PREPAID EXPENSE RECOGNISED IN ACCRUAL BASED ACCOUNTING.
SO APEX WILL DEDUCT $ 24000 IN 2019
$ NIL IN 2020
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