> Hello > > "Pre-payments transactions differ from cut-off issues" means that one > (the accountant) needs to make two distinct tasks: > > - account for what is to be recognized as a pre-payment transaction > with a partner, thus using or not standard A/R accounts -depending on local > accounting requirements if any - This a purely financial transaction > involving B/S accounts, at the exception of any P/L account. > > yes, but you will agree that it is pointless to use a prepaid (B/S) account if the payment not related to an expense/revenue that can be split into 2 fiscal year.
> > - at the closing of the considered period ensure that accounted costs > and revenues belong to this period (the cut-off accounting process). When a > cut-off needs to be done for a sincere accounting , then the accountant > will use pre-paid or accrual accounts to transfer that part of the > costs/revenues to the following period(s). > > Yes exactly. accrual accounts AND prepaid. Thanks Frederic
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