The prompt
Score 10 of 10, Excellent
Use it when You need to understand or explain how a transaction is recorded and why, before checking with your accountant.
- {{transaction}}
- {{current_entry}}
- {{framework}}
- {{question}}
- {{reader}}
Full prompt and why it works
Prompt
What happened (the transaction, amounts, dates and any contract terms that matter): """ {{transaction}} """ How it has been recorded so far, if at all: """ {{current_entry}} """ Accounting framework our books follow: {{framework}} My question: {{question}} Task: Explain how this transaction is usually recorded and why, in plain terms, for {{reader}}. The goal is to understand the treatment well enough to have a useful conversation with our accountant, not to settle it. Requirements: - Show the journal entry or entries as a table with the columns Date, Account, Debit, Credit, using only the amounts above, and check that debits equal credits. If the treatment spreads over several periods, show the first entry and one later entry and explain the pattern, for example "a 12,000 annual prepayment becomes 1,000 of expense each month". - Explain the effect on the profit and loss statement, the balance sheet and cash, one short paragraph each. - Explain the principle behind the treatment (for example, matching a cost to the period it relates to) in everyday words, and define each accounting term the first time you use it. - If the recording so far differs from the usual treatment, say what differs and why it might matter. Do not call it wrong; there may be facts I have not given. - Where the answer depends on judgment or on facts I have not given, such as the contract length, say so and show how the treatment would change. - Name a standard only if you are confident it applies under {{framework}}, and do not quote paragraph numbers. If I wrote "not sure", explain the most common treatment and say where frameworks differ. - Do not give tax advice. Note where the tax treatment may differ from the books. Format: the entry table, then short sections headed "What this does to the numbers", "Why it is recorded this way", "Where judgment comes in" and "Questions to ask our accountant" (up to 5). Keep it under 450 words. This is an explanation for discussion. Our accountant decides the treatment, especially for anything that will be filed or audited.
Variables
- {{transaction}}
- What happened, with amounts, dates and any contract terms, for example a prepaid annual license or a customer deposit.
- {{current_entry}}
- How it has been recorded so far, if you know, or "not recorded yet".
- {{framework}}
- The rules your books follow, for example US GAAP, IFRS, a local standard, cash basis, or "not sure".
- {{question}}
- What you want to understand, for example "why isn't the full payment an expense this month?"
- {{reader}}
- Who the explanation is for, for example "me, a founder without accounting training" or "a department head".
Why it works
- Who it's for. The aim is a better conversation with your accountant, not a ruling, so the answer ends with where judgment comes in and the questions to ask.
- What to avoid. It names a standard only when confident and never quotes paragraph numbers, which is where explanations of accounting rules most often go wrong.
- If unsure. If the current recording differs from the usual treatment, it says what differs without calling it wrong, since facts you have not given may justify it.