Expenses paid in advance such as rent and insurance are classified as prepaid expenses. Into what category are they placed?

Question

Quizplus · Accepted Answer

Prepaid expenses are classified as assets because they represent future economic benefits that are expected to be received by the organization. As the benefit is used up over time, the prepaid expense is gradually recorded as an expense in the income statement.

Expenses Paid in Advance Such as Rent and Insurance Are