Prepaid expenses are eventually expected to
A) become expenses when their future economic value expires.
B) become revenues when services are performed.
C) become expenses in the period when they are paid.
D) become revenues when the liability is no longer owed.

Question

Quizplus · Accepted Answer

Prepaid expenses are initially recorded as assets because they represent future economic benefits, but they are eventually expected to become expenses when their future economic value expires, such as when a prepaid insurance policy expires or a prepaid rent agreement ends.

Prepaid Expenses Are Eventually Expected to