Asked by Kiirt Giosk on Jun 25, 2024
Verified
Prepaid expenses are an example of an expense.
Prepaid Expenses
Payments made in advance for goods or services to be received in the future, considered as a current asset on the balance sheet.
Expense
Money spent or cost incurred in an entity’s efforts to generate revenue, representing the cost of doing business.
- Appreciate the role played by revenue and expense accounts in determining the financial gain of a business.
Verified Answer
OH
Olivia Howington
Jun 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
- Appreciate the role played by revenue and expense accounts in determining the financial gain of a business.