Appropriation of expenses with quickbook

lomb

Where say an insurance policy is taken out on the 1 Nov 2012 and runs from the 1 Nov 2012 to 30 Sept 2013 in quickbooks the cost is entered of say 500euros.

For taxation purposes would most then book that expense in the current tax year? Alternatively where it is part assigned to tax years how would this be managed via quickbooks? Or is this done off quickbooks and a list of various expenses that only apply to part tax years kept? And a running tally kept?

Just setting up quickbooks and appreciate any help thanks.

lomb

Any help would be much appreciated. Thanks guys.

kennyb3

lomb wrote: »

Where say an insurance policy is taken out on the 1 Nov 2012 and runs from the 1 Nov 2012 to 30 Sept 2013 in quickbooks the cost is entered of say 500euros.

For taxation purposes would most then book that expense in the current tax year? Alternatively where it is part assigned to tax years how would this be managed via quickbooks? Or is this done off quickbooks and a list of various expenses that only apply to part tax years kept? And a running tally kept?

Just setting up quickbooks and appreciate any help thanks.

Assuming your accounts run to the end of 2012 (you haven't said), 9 months would be prepaid.

You put in the full €500, then enter a prepayment for 9/11ths (does the policy not run to Oct? only an 11month policy?)

So you'd:

DR prepayments (€409.09 being 9/11ths)
CR Insurance (as above)

lomb

My apologies Kenny it runs to 30 Oct so its a 12 month policy. And yes y/e is 31 Dec.
I still dont understand fully though.
I have accounts set up in quickbooks, so perumably enter the 500 paid in the bank account, should I then put 2/12 into insurance and remainder into a 'prepayment' account. Persumably next year, I then take money out of the prepayment account and put it in insurance yes? So I should set up a prepayment account then it seems?
This should all balance out then.
I assume for tax purposes it would be inappropriate to book the cost of the policy this tax year? Thanks again for the help:)

kennyb3

lomb wrote: »

My apologies Kenny it runs to 30 Oct so its a 12 month policy. And yes y/e is 31 Dec.
I still dont understand fully though.
I have accounts set up in quickbooks, so perumably enter the 500 paid in the bank account, should I then put 2/12 into insurance and remainder into a 'prepayment' account. Persumably next year, I then take money out of the prepayment account and put it in insurance yes? So I should set up a prepayment account then it seems?
This should all balance out then.
I assume for tax purposes it would be inappropriate to book the cost of the policy this tax year? Thanks again for the help:)

Pretty much exactly what you said.

lomb

kennyb3 wrote: »

Pretty much exactly what you said.

Thank you Kenny I very much appreciate it.