When a prepaid expense is recorded initially as an expense, the adjusting entry transfers the unused portion of the expense to the asset account.

Name: When a prepaid expense is recorded initially as an expense, the adjusting entry transfers the unused portion of the expense to the asset account.
Brand: Quizplus
Rating: 4.9 (47 reviews)

Question

Quizplus · Accepted Answer

When a prepaid expense is initially recorded as an expense, the adjusting entry is made to transfer the unused portion to an asset account, reflecting the future economic benefit.

When a Prepaid Expense Is Recorded Initially as an Expense