What are prepaid expenses, and how are they recorded?

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Accepted Answer

Prepaid expenses are expenses paid in advance but not yet incurred. They are recorded as assets on the balance sheet.

Prepaid expenses are considered assets because they represent future economic benefits.
They are initially recorded as assets on the balance sheet and then expensed over time as they are incurred.
Common examples of prepaid expenses include prepaid rent, insurance premiums, and prepaid subscriptions.
To record a prepaid expense, a company debits the prepaid expense account and credits the cash or accounts payable account.

Accepted Answer

Prepaid expenses is just like a current asset recorded in balance sheet for the expenses to be incurred in future against which payment made in advance. For example when we take insurance we make entry i.e Prepaid insurance Dr. and Insurance company Cr. and in every month upto the date of end of insurance period we make entry like Expense ac Dr. and Prepaid Insurance Cr.

Accepted Answer

prepaid experience are  paid in advance but experience is not inccurd... prepaid experience is  going to get benfits in future  so prepaid experience is a asset  such as prepaid expenses is posting on assets side of  the balance sheet and  in profit or loss account debit side ( in p&l account deduct from  relavent expresses)

Accepted Answer

What Are Prepaid Expenses? Prepaid expenses are future expenses that are paid in advance, such as rent or insurance. On the balance sheet, prepaid expenses are first recorded as an asset. As the benefits of the assets are realized over time, the amount is then recorded as an

Accepted Answer

Prepaid expenses are future expenses that are paid in advance, such as rent or insurance. On the balance sheet, prepaid expenses are first recorded as an asset. As the benefits of the assets are realized over time, the amount is then recorded as an expense.

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What are prepaid expenses, and how are they recorded?

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