Business example: pay medical insurance in April for May expense so invoice transaction date in May. Trial Balance does not match GL at the end of April because the April check transaction is missing. It should show a negative balance on the invoice to reflect the balance in the General Ledger control account.

The whole point of the Trial Balance Report is to reconcile the detail in AP to the control account in GL. Without this enhancement, it's just not a consistently accurate report.

by: Michael S. | over a year ago | Financial Management

Comments

• If you are paying this expense early and dating it in the next month, the system is working correct. You should pay off the balance sheet-and set up a journal entry to expense from the prepaid account to the expense account.

  by: Douglas P. | over a year ago

• I would date the invoice in April, book it to prepaid expense in April then expense it in May with a JE - crediting the prepaid. For better or worse, this happens all the time with insurance, rent and other expenses.

  by: Katherine W. | over a year ago

• I agree with Katherine. That's what we do where I work - I would date the invoice in April, book it to prepaid expense in April then expense it in May with a JE - crediting the prepaid. For better or worse, this happens all the time with insurance, rent and other expenses.

  by: Shelly T. | over a year ago