Advisory Fees Expenses Paid In Advance Journal Entry

Prepaid Advisory Fees Expenses Adjusting Entry

When the client paid advisory fee expense in advance to the professional consulting company for getting services which are rendered / performed by the company to the client in future, then such paying of advisory fees expense in advance is a Current Asset for the client’s business and the following journal entry is recorded as shown below:

(Assuming, Client’s Business Paid Advisory Fees Expense of Rs. 5000 in advance to the professional consulting company )

                                            Advisory Fees Expense Paid In Advance a/c  5000

 

                                                                                                                            Cash a/c  5000

 

                                                                (Advisory Fees Expense Paid In Advance for the period)

When the client’s business actually received the services against the advisory fees expense paid in advance, then the following adjusting entry is recorded as shown below:

                                        Advisory Fees Expense a/c  5000

 

                                                                                 Advisory Fees Expense Paid In Advance a/c  5000

 

                                 (Now, Actually Got Benefits Against The Advisory Fees Expense Paid In Advance)

Advisory fees expense paid in advance is also called Prepaid Advisory Fees Expense and it is recorded on the balance sheet of client’s business.

So, we can say that Advisory Fees Expense Paid In Advance is a Current Asset from the point view of client’s business and it is shown on the assets side of balance sheet of client’s business as it is a Balance Sheet Account.