Assets such as prepaid rent may be thought of as costs that are stored to be carried forward to future periods and recorded as expenses in the future.

Question

Quizplus · Accepted Answer

Prepaid rent is an asset that represents rent paid in advance for future periods. It is recorded as an asset on the balance sheet and then gradually expensed over the period to which it relates. Therefore, it is like a cost that is stored to be carried forward to future periods and recorded as expense in the future.

Assets Such as Prepaid Rent May Be Thought of as Costs