Question

what is the different debit to prepaid expense credit to expense and debit to expense credit to prepaid expense

Answer 1

Debit to prepaid expense credit to expense

In the given case expense account is debited with actual payment which is not the actual expenses . The actual payment is including subsequent accounting periods expense ie advance payment of expense , Hence to record the actual expense of current accounting period we have to transfer expense related to subsequent period to prepaid expense by crediting prepaid expense and debiting prepaid expense.

Debit to expense credit to prepaid expense

Prepaid expense is expense paid in advance but which has not yet been incurred.prepaid expenses is credited and debited to expene when such expense is actualy incured .