Prepaid expenses are generally:
A)Payments made for products and services that do not ever expire.
B)Classified as liabilities on the balance sheet.
C)Decreases in equity.
D)Assets that represent prepayments of future expenses.
E)Promises of payments by customers.

Question

Quizplus · Accepted Answer

Prepaid expenses are assets that represent prepayments of future expenses. This means that the company has already paid for a future expense, and will recognize the corresponding expense as it is incurred in the future. Prepaid expenses are typically classified as current assets on the balance sheet.

Prepaid Expenses Are Generally