A deferred expense such as prepaid insurance is created when cash is paid in advance of the expense incurrence and is reduced when the expense is actually incurred.

Name: A deferred expense such as prepaid insurance is created when cash is paid in advance of the expense incurrence and is reduced when the expense is actually incurred.
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Deferred expenses are previously acquired assets that need to be adjusted to reflect the amount of expense incurred in using the asset to generate revenue.

A Deferred Expense Such as Prepaid Insurance Is Created When