Prepaid Expenses
Prepaid expenses are payments made in advance for goods or services that will be consumed over future periods and are recorded as current assets until the related benefit is realized.
Example: Example: A company pays $12,000 for a one-year insurance policy in advance; the entry records the full amount as a Prepaid Insurance asset, and each month $1,000 is expensed as the policy coverage applies.
💬 Comments