Prepaid accounts (also called prepaid expenses) are generally:
A) Decreases in equity.
B) Payments made for products and services that never expire.
C) Promises of payments by customers.
D) Classified as liabilities on the balance sheet.
E) Assets that represent prepayments of future expenses.

Question

Quizplus · Accepted Answer

Prepaid accounts, or prepaid expenses, are assets that represent payments made in advance for future expenses. These prepayments will eventually be expensed as the related goods or services are used or consumed.

Prepaid Accounts (Also Called Prepaid Expenses) Are Generally