At the end of the fiscal period, prepaid expenses are reported on the income statement as expenses.

Question

Quizplus · Accepted Answer

Prepaid expenses are initially recorded as assets on the balance sheet and are only expensed as they are used or consumed, typically over time. Therefore, prepaid expenses would not be reported as expenses on the income statement at the end of the fiscal period. Rather, any portion of the prepaid expense that has been used or consumed during the period would be expensed and reflected as an expense on the income statement.

At the End of the Fiscal Period, Prepaid Expenses Are