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.
Prepaids are assets that appear on the balance sheet.
Prepaid expense is the expense for which payment has already made but the actual benefit has not yet taken by company so it is the asset of company and shown as current asset in balance sheet.
A prepaid expense is an asset listed on the balance sheet.
Life of the expense
[Debit] Prepaid Expense xxxxx [Credit] cash / bank xxxxx
Prepaid insurance is reported on the balance sheet as a
A prepaid expense account is an asset, thus not a temporary account either.
A prepaid expense account is an asset, thus not a temporary account either.
A prepaid expense account is an asset, thus not a temporary account either.
it is because,we just doing a early payment for the future expense
If legal expense paid in advance of rendering services then it is prepaid expense otherwise not. Also this company provides all the necesary steps. tarifcheck365.com
it will either increase or decrease profit. Prepaid expense should increase profit as the amount has been overstated.
Asset
prepaid expenses are those expenses for which cash is paid in advance but if there is no cash payment then that is not prepaid expense and hence no entry required.