Expenses paid and recorded as assets before they are used are called
A) accrued expenses.
B) interim expenses.
C) prepaid expenses.
D) unearned expenses.

Question

Quizplus · Accepted Answer

Expenses that are paid and recorded as assets before they are used are known as prepaid expenses. These are expenses that are expected to result in future benefits for the business, such as insurance premiums or rent payments. Prepaid expenses are recorded on the balance sheet as assets until they are used or consumed, at which point they are expensed through the income statement. Examples of prepaid expenses include prepaid rent, prepaid insurance, and prepaid advertising.

Expenses Paid and Recorded as Assets Before They Are Used