Prepaid expenses are
A)paid and recorded in an asset account before they are used or consumed.
B)paid and recorded in an asset account after they are used or consumed.
C)incurred but not yet paid or recorded.
D)incurred and already paid or recorded.

Question

Quizplus · Accepted Answer

Prepaid expenses are payments made for goods or services to be received in the future. They are recorded as assets on the balance sheet because they represent future economic benefits to the company. As these goods or services are used or consumed, the prepaid amount is gradually expensed.

Prepaid Expenses Are