The asset that results from the payment of expenses in advance is
A)Accounts receivable.
B)Short-term investments.
C)Inventory.
D)Prepaid expense.

Question

Quizplus · Accepted Answer

Advance payment of expenses results in an asset known as prepaid expenses. This asset represents the cost that has been paid for a service or product that will be received at a later date. Examples include prepaid rent, insurance premiums, and equipment lease payments. Therefore, the correct choice is D.

The Asset That Results from the Payment of Expenses in Advance