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.
