[sadianarin]

Hello,

I am facing a situation where my company paid $20,000 as prepaid expense for something, which should not have been in prepaid, how do i re-class that entry? can i just do consulting fee Dr. and Prepaid exp Cr.?

[Leach2587]

@sadianarin Yup it should be as simple as debit the expense for the full amount of the prepaid and Credit the prepaid asset.

[TiffaNiffaNi]

If you are still in the same period, I would probably reverse the original entry (backdate) and then record the correct entry. If the period is closed, then go ahead debit expense and credit the prepaid.

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