A prepaid expense is
A) an expense, such as rent, that is paid before the upcoming period in which it is due.
B) a nonphysical asset, such as a patent or trademark, that has economic value in the form of expected benefit.
C) an amount due from a customer who has purchased goods on credit.
D) an asset that can or will be converted to cash within the following year.
E) an asset with long-term use or value, such as land, buildings, and equipment.

Question

Quizplus · Accepted Answer

A prepaid expense is an expense that has been paid in advance, such as rent or insurance premiums, for a future period. It is recorded as an asset until the expense is actually incurred in the future period.

A Prepaid Expense Is