Question

When financial statements are prepared, unexpired prepaid accounts are recorded as (expenses/assets/liabilities) and the expired portion of the prepaid account is reported as a(n) (expense/asset/liability).

Answer 1

During the preparation of Prepaid account, unexpired prepaid accounts are recorded as expenses and the expired portion of the prepaid account is reported as an asset.

What is a Prepaid account?

In accounting, a Prepaid account reflects the advanced payments for goods or services to be received in the future.

In conclusion, the unexpired prepaid accounts are recorded as expenses and the expired portion of the prepaid account is reported as an asset.

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