Prepaid expenses classified as current assets represent:
A) current year expenses that have been accrued.
B) current year cash payments that will be matched against revenues of the next year or for several future years.
C) cash that has been segregated to pay for future expenses.
D)expenses of the current year that have been paid in advance.

Question

Quizplus · Accepted Answer

Prepaid expenses are payments made in advance for goods or services to be received in the future. They are recorded as current assets because they will be used up or expire within the next year, matching them against future revenues.

Prepaid Expenses Classified as Current Assets Represent