Which of the following statements is not true regarding prepaid expenses?
A)Prepaid expenses represent assets.
B)Prepaid expenses are shown in a special section of the income statement.
C)Prepaid expenses become expenses only as goods or services are used up.
D)Prepaid expenses appear in the balance sheet.

Question

Quizplus · Accepted Answer

Prepaid expenses are shown as assets on the balance sheet, not on a special section of the income statement. They become expenses as goods or services are used up and are reflected on the income statement as expenses.

Which of the Following Statements Is Not True Regarding Prepaid