Prepaid expenses are an example of an expense.

Prepaid Expenses

Expenses paid in advance for benefits to be received in the future, recorded as assets on a balance sheet until used.

Expense

An expense is a cost incurred in the process of generating revenue. Expenses reduce a company's income and are accounted for in the income statement.

Distinguish between expenses and prepaid expenses.

Verified Answer

Katerina YanushefskiApr 27, 2024

Final Answer :

False

Explanation :

Prepaid expenses are considered an asset on the balance sheet because they represent goods or services that will be used in the future to generate economic benefits.

Learning Objectives

Distinguish between expenses and prepaid expenses.

Prepaid expenses are an example of an expense.

Definitions

Learning Objectives

Learning Objectives

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