Prepaid expenses are often referred to as deferrals because the recording of the expense is deferred until after cash is paid.

Name: Prepaid expenses are often referred to as deferrals because the recording of the expense is deferred until after cash is paid.
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Question

Quizplus · Accepted Answer

Prepaid expenses are assets that represent cash paid for goods or services that will be used in the future. The expense is not recognized until the goods or services are actually received or consumed, which is why it is referred to as a deferral.

Prepaid Expenses Are Often Referred to as Deferrals Because the Recording