Prepaid expense accounts appear on:
A)the Income Statement.
B)the Balance Sheet.
C)the Statement of Retained Earnings and on the Income Statement.
D)both the Income Statement and Balance Sheet.

Question

Quizplus · Accepted Answer

Prepaid expenses are assets that represent payments made in advance for goods and services that will be received later. As such, they appear on the balance sheet as assets. They are not included in the income statement until the expenses they represent are incurred. Therefore, they do not appear on the income statement.

Prepaid Expense Accounts Appear On