✔ 最佳答案
I am confused with the audit adjustment and your narration. Let's begin with the audit adjustment to analyze.
The audit adjustment increased the amount of prepaid expenses. That means you have paid for the insurance already.
Your narration indicated that the insurance was still needed to pay. Then what is "prepaid expenses" for? We should use Accrued expenses.
Now you see, the two results above are conflict.Other than the audit ajustment, I have to know what you did (the entries) for insurance before 30/6/09.
2011-10-22 16:24:03 補充:
There might be such a situation for you to consider. (we pay for the insurance before it starts)
e.g. You paid on 31/12/08 for year 2009, and debt. expense at one time. On 30/06/09, the insurance wasn't due yet. So the auditor thought that only half of the amount should be calculated as expense
2011-10-22 16:24:45 補充:
and the rest should be moved to prepaid expense and to be calculated as expense after 30/06/09
By the same token, the insurance you would pay for at the end of 2009 was for 2010.
So, when the insurance of 2009 was due, the entry should be
Dr. expenses( insurance)
Cr. prepaid expenses(insurance)
2011-10-22 16:24:55 補充:
When you paid money at the end of that year for the next year
Dr. Prepaid expenses (insruance)
Cr. Bank