On a classiﬁed balance sheet, prepaid expenses are classiﬁed as
A) a current liability.
B) property, plant, and equipment.
C) a current asset.
D) a long-term investment.

Question

Quizplus · Accepted Answer

Prepaid expenses are classified as a current asset because they represent goods or services that have been paid for by the company but have not yet been consumed or used. This means they will provide economic benefits within the next year or operating cycle.

On a Classiﬁed Balance Sheet, Prepaid Expenses Are Classiﬁed as