A prepayment consumed during a period is:
A) an item that is an expense of a given period but not necessarily a cash payment for that period.
B) an item that may be a cash payment for that period and also an expense for that period.
C) an item that that may be expensed in the current period.
D) any of the above.

Question

Quizplus · Accepted Answer

Prepayments can be expenses of a given period without being cash payments for that period, can be both cash payments and expenses for the period, or can be expensed in the current period, depending on the situation and accounting practices.

A Prepayment Consumed During a Period Is