0
Prepaid expenses are an asset because you (as the company) is owed something. When you are owed something by another then you list it as an asset until it's paid.
Investopedia also explains it similar to this:
While prepaid expenses are initially recorded as assets, their value is expensed over time as the benefit is received onto the income statement, because unlike conventional expenses, the business will receive something of value in the near future.
Wiki User
∙ 10y ago
Add your answer:
Earn +20 pts
What is nature of Prepaid expense?
Asset
Is a prepaid expense on the balance sheet or the income statements?
A prepaid expense is an asset listed on the balance sheet.
What type of account is a prepaid expense account?
A prepaid expense account is an asset, thus not a temporary account either.
Is insurance expense an asset or liability?
Prepaid insurance would be an asset. Insurance expense is when the insurance has been used up, thus making it an actual expense on the Income Statement. Whereas Prepaid Insurance on a Balance sheet is classified as an Asset.
Is supplies expense a liability or asset?
Supplies expense is neither an asset nor a liability it is an expense. Prepaid supplies would be an example of an asset and as the supplies are used they become expenses, supplies expense.
What is nature of Prepaid expense?
Asset
Is a prepaid expense on the balance sheet or the income statements?
A prepaid expense is an asset listed on the balance sheet.
What does an asset expense relationship exist with?
prepaid expense adjusting entries
What type of account is a prepaid expense account?
A prepaid expense account is an asset, thus not a temporary account either.
What account type is a prepaid expense account?
A prepaid expense account is an asset, thus not a temporary account either.
What account types is a prepaid expense account?
A prepaid expense account is an asset, thus not a temporary account either.
Is expense a asset or liability?
Supplies expense is neither an asset nor a liability it is an expense. Prepaid supplies would be an example of an asset and as the supplies are used they become expenses, supplies expense.
Is insurance expense an asset or liability?
Prepaid insurance would be an asset. Insurance expense is when the insurance has been used up, thus making it an actual expense on the Income Statement. Whereas Prepaid Insurance on a Balance sheet is classified as an Asset.
Is supplies expense a liability or asset?
Supplies expense is neither an asset nor a liability it is an expense. Prepaid supplies would be an example of an asset and as the supplies are used they become expenses, supplies expense.
What is prepaid expense and where is it reported in the financial statements?
Prepaid expense is that amount of expense which is paid in advance and expense is not actually incurred and prepaid expense is current assets of business and show under assets side of balances heet.
Account type and normal balance of prepaid expense?
asset, debit
What is the difference between prepaid rent and rent expense?
Prepaid rent is an asset and represents and advance payment for a future benefit Rent expense is an expense and is the expended portion of the rent consumed.
