Prepaid accounts (also called prepaid expenses)are generally:
A)Payments made for products and services that never expire.
B)Classified as liabilities on the balance sheet.
C)Classified as equity on the balance sheet.
D)Assets that represent prepayments of future expenses.
E)Promises of payments by customers.

Question

Quizplus · Accepted Answer

Prepaid accounts represent assets that have been paid for in advance and will be used or consumed in the future. They are recorded as assets on the balance sheet until the prepaid expenses are actually incurred, at which time they are expensed.

Prepaid Accounts (Also Called Prepaid Expenses)are Generally