Under the accrual basis of accounting,prepaid assets become expenses when they expire.

Question

Quizplus · Accepted Answer

Prepaid assets are initially recorded as assets because they are paid for in advance, but they become expenses when they are used up or expire over time. This is in line with the accrual basis of accounting, which requires expenses to be recognized when they are incurred, not when payment is made. Therefore, option A is true.

Under the Accrual Basis of Accounting,prepaid Assets Become Expenses When