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hello everyone this is Larry your instructor for financial accounting Id like to show you in this brief video a couple of examples of working with prepaid expenses specifically how to debit and how to credit and make the appropriate adjustments lets start out by first showing a simple example where we pay a bill before we talk about prepaid expenses lets do an example where well say we have just today paid a $500 utility bill what would be the debit and the credit to record this well the debit would likely be we probably have an account known as utility expense or utilities expense so well debit utility expense for five hundred dollars and since weve paid the bill going to credit cash for five hundred dollars in simple terms thats paying a bill for this current month or of course we can show T accounts for this the same thing just in a more visual form will debit utility expense for five hundred credit cash for five hundred dollars paying a simple bill for the current period no
