Prepaid expenses are recorded as liabilities.

Name: Prepaid expenses are recorded as liabilities.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Prepaid expenses are recorded as assets, not liabilities. They represent a payment made in advance for goods or services to be received in the future. Once the goods or services are received, the prepaid expense is then recognized as an expense and recorded on the income statement.

Prepaid Expenses Are Recorded as Liabilities