Alpha software inc. made an advance rent payment of $6,000 for its warehouse. the accounting period for which the company paid the rent was from january to june 2014. the accountant recorded a rent payment of $1,000 in the month of january, 2014. which accounting principle guides this action?

The accounting principle of this action is the accrual basis method, which means that expenses are recognized when incurred regardless of when it was paid. The rent payment of $1000 was recorded in January 2014 for the Alpha Software Inc. has the responsibility of monthly warehouse rental even if it made an advance payment for six months. This recording will be done until the month of June.

Moreover, this action may also came from the expense recognition principle that recognize incurred expenses even if it is not yet paid or an advance payment was already given.

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