Should I considered visa cost for an employee as a prepaid expense which making Journal entry?

[Orangzeb khan]

Hi,
Good evening All,


I am working as accountant in two companies (in one as part time of course ) in United Arab Emirates. We have big expense which last long up to 2 years. For example We have 2 year employment Visa & one year Health Insurance policy & for such we paid in advance. ( Should I put these expenses in prepaid expenses )
so what is the right way to record these kinds of expenses that is meet accounting standards.

I hope this help.

 

[Rehan]

Well Dear Its a Simple thing. Depend upon Company Policy But you should be Aware of Some Facts .

There is No way you know Employee Goona Stay up To 2 Years. so If Employee Not goona Stay Upto 2 years Then What you will do ?

• I personally make Them Expense Immidiately When it occurs.

• But if you wanna Make system complex Then Make it prepayment and Keep on Expense them out from system Every month and If Employee Leave Company then Remaining Prepayment Make it Expense out in the same month of His Resignation.

2 Methods But Which One You have to Adopt It depends upon some Factors

Company size If Company Size Is 200 employees and Have only 1 accountant Then second Method Is wrong Because You will be Unable To Follow All Prepayment of Visa Charges Etc . . . .

Bro Completly Depend On you Which One To choose. Choose Wisely.

I hope this is Answer of The qustion.

Feel Free to ask Any other Obstacles.


Thanks

Rehan

 

[Orangzeb khan]

Thanks Rehan,

Your answer is realre helpful.