Prepaid expenses are
A)Always debited to an expense account.
B)Payments made for economic benefits that never expire.
C)Generally all combined into one account called "Miscellaneous Expenses".
D)Classified as liabilities on the balance sheet.
E)Assets created by payments for economic benefits that are not used up until later.

Question

Quizplus · Accepted Answer

Prepaid expenses are assets created by payments for economic benefits that are not used up until later. These assets are recorded on the balance sheet as a current asset until the benefit is consumed or expires, at which point they are recognized as an expense on the income statement.

Prepaid Expenses Are