Answer to Question #104995 in Accounting for Levarno

Question

Receipt and payments book.granny Sithole has a prepaid box for electricity,she paid R850 to upload electricity

Answer 1

A receipts and payments account is a summary of actual cash receipts and payments extracted from the cash book over a certain period. All cash received and paid during the period is included in this account. The receipts are entered on the debit side, that in on the same side as that on which théy appear in the cash book.

A prepaid expense is an asset that appears on the balance sheet as a result of making advance payments for goods and services to be received within the next 12 months. 

A prepaid expense is an asset.