A prepaid expense is an expense that has been paid for in advance but not yet incurred. In business, a prepaid expense is recorded as an asseton the balance sheet that results … See more

Companies make prepayments for goods or services such as leased office equipment or insurancecoverage that provide continual benefits over time. Goods or services of this nature can… See more

According to generally accepted accounting principles(GAAP), expenses should be recorded in the same accounting period as the benefit generated from the related asset. For … See more

For example, assume ABC Company purchases insurance for the upcoming 12-month period. It pays $120,000 upfront for the insurance policy. ABC Company will initially boo… See more

Prepaid expense is an accounting line item on a company's balance sheet that refers to goods and services that have been paid for but not yet incurred. Recording prepaid expenses … See more