Question

2)Prepaid expenses is________account.
3) Every Journal entry requires_________.​

Answer 1

Explanation:

Prepaid expense is nominal account.

Every Journal Entry requires narration.

Answer 2

ANSWER :

★ Prepaid expenses is a Representative Personal account

• ✎ According to Traditional Approach or English Approach of classification of accounts, Prepaid expenses is a Representative Personal Account.

• ✎ Representative personal accounts are the accounts which represent a certain person or a group of persons although the name of the concerned person or persons are not mentioned in the account head. Such type of account head occurs in cases of Outstanding expenses, prepaid expenses, income receivable and income received in advance.

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★ Prepaid expenses is an Asset account.

• ✎ According to Modern Approach or American Approach of classification of accounts, Prepaid expenses is an Asset Account.

• ✎ Assets accounts are the accounts of assets and properties held by a business entity. It includes land and buildings, plant and machinery, patents, goodwill, debtors, prepaid expenses etc.

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★ Every journal entry requires Narration.

• ✎ After every journal entry, a brief explanation of the transaction for which the journal entry has been passed is given. The brief explanation is known as Narration. It enables the persons going through the journal entry have an idea about the transaction of the entry.

• ✎ Journal is a book of original entry in which transactions are originally recorded from the source documents in chronological order showing the accounts to be debited and credited in a systematic manner.