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prepaid expense is not an expense because we are not use the expense yet.it just the earlier payment for the future uses
Prepaid expenses are not expenses but current assets. why? this is because you had paid in advance for the itemu want to purhase. eg, if u renting a building which cost u $100000, but u paid $200000, then that additional paid amount is your asset. what is the definition of assets? well, there are 3 component that makes them up. by understanding these 3 component, u can more or less classify items u are not sure. first component, it brings future economic benefits, second you have control over it, and third, it rises from a past event. hope this helps
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What is the life of Prepaid Expense?
Life of the expense
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 a legal expense considered a prepaid 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
How does prepaid expense and accrued expense affect the profit of a business?
it will either increase or decrease profit. Prepaid expense should increase profit as the amount has been overstated.
What is the life of Prepaid Expense?
Life of the expense
How do you book a Prepaid Expense?
[Debit] Prepaid Expense xxxxx [Credit] cash / bank xxxxx
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.
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.
Why prepaid expense are not expense?
it is because,we just doing a early payment for the future expense
Is a legal expense considered a prepaid 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
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.
How does prepaid expense and accrued expense affect the profit of a business?
it will either increase or decrease profit. Prepaid expense should increase profit as the amount has been overstated.
What is nature of Prepaid expense?
Asset
What is the journal entry for prepaid expense when cash is not paid?
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.
