Prepaid Expenses: Accounting
I understand that if a company (Let's call it Rover) pays 3 months of rent for an office space in advance, it's called a prepaid expense.
在这种情况下，损益表没有't change since Rover hasn't started using the office space yet (it's not expensed until Rover starts using the rental space in month 1, 2, 3).
但是，那cash flow changes sinceRover paid in advance.
Thus, we make cash adjustments to reflect this.If the net income(assuming nothing else changed) was 100 and Rover paid 60 in cash for the office space, the net cash is now 100 - 60 = 40.
Thus, I understand that prepaid expense increased, so we adjust the cash down to reflect how much cash Rover actually generated in this period.
Question: Ifprepaid expensesdecrease as Rover starts using the office space in month 1, why would cash increase?
我们预付了60款，我们没有扣除现金，为什么我们会增加现金净变化？
Net Income: 100
更改预付费经验：20
净变更现金：120
评论 （9)
更具体地说，我指的是现金流报表的现金增加
You would need to add back the prepaid asset amortization (expense in I/S) because its dragging down your net income, but it had zero cash effect. Think of it this way, imagine in that second year, you made one cash sale for $120, and had the prepaid asset amort. of $20. Your net income is $100 ($120 rev minus $20 expense).
您那个时期的现金流入是什么？$ 120。因此，当NI启动C/F语句时，您需要在预付资产帐户的20美元帐户中添加更改，以从运营中获得现金流量。
希望有帮助。
More simply, the amortization of the prepaid asset doesn't impact cash at all.
If you credit the asset for $20, you debit the rent exp for $20. That's it. Income has no direct impact on cash.
预付费用_accounting(最初发布：2018年5月30日)
I understand that if a company (Let's call it Rover) pays 3 months of rent for an office space in advance, it's called a prepaid expense. In this case, the income statement doesn't change since Rover hasn't started using the office space yet (it's not expensed until Rover starts using the rental space in month 1, 2, 3). However, the cash flow changes since Rover paid in advance. Thus, we make cash adjustments to reflect this. If the net income (assuming nothing else changed) was 100 and Rover paid 60 in cash for the office space, the net cash is now 100 - 60 = 40.
Thus, I understand that prepaid expense increased, so we adjust the cash down to reflect how much cash Rover actually generated in this period.
问题：如果漫游者在第1个月开始使用办公空间时，预付费费用会减少，为什么会增加现金？我们预付了60款，我们没有扣除现金，为什么我们会增加现金净变化？
Net Income: 100
更改预付费经验：20
净变更现金：120
More specifically, I am referring to a cash increase in thecash flow statement
- 了解更多
- |建议的资源
了解更多300+ video lessons across 6 modeling courses taught by elite practitioners at the top investment banks and private equity funds -- Excel Modeling -- Financial Statement Modeling -- M&A Modeling -- LBO Modeling -- DCF and Valuation Modeling -- ALL INCLUDED + 2 Huge Bonuses.
了解更多Because you're adding back a non-cash expense. After month 1, you incur 1 month of rental expense right? That expense flows through the income statement but since the cash for that expense was already paid in advance, the expense that incurred is actually non-cash, so you add that back to get a sense of the actual change in cash.
Created a 1-step skincare solution for men. Purchase + reviews appreciated:
www.w34th.com
Thank you for the helpful comment! If today I was accounting for inventory, when inventory is being used is it recorded as an expense on the income statement as well?
Yeah inventory would be reflected in商品成本and be incurred at the moment of sale
Created a 1-step skincare solution for men. Purchase + reviews appreciated:
www.w34th.com
Et dolor id veritatis suscipit repellendus. Ut dolorum perferendis officia delectus consequatur mollitia animi. Soluta est illo dolores praesentium labore mollitia aut aut. Sit dignissimos tenetur omnis mollitia tenetur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus:6 financial modeling lessons free($199 value)
或者Unlockwith your social account...