A prepaid expense is an asset account that turns into an expense as the value of the asset decreases. To create a journal entry for a prepaid expense, you have to debit the prepaid expense and credit the cash a
At the end of each recording period, a company should properly estimate the dollar amount for each of its accrued expenses, and then record it as an expense account with a corresponding payable/accrued expense liability. The format of the journal entry is shown below: Accrued expenses example F...
An asset created by prepayment of an expense is___.? recorded as a credit to an unearned revenue accountrecorded as a debit to an unearned revenue accountrecorded as a credit to a prepaid expense accountrecorded as a debit to a prepaid expense account相关知识点: 试题...
The journal entry credits the prepaid asset account (on the balance sheet) and debits the expense account (on the income statement). The records will reflect that incurred expense for the period, which will reduce the prepaid asset by that amount. What is the Effect of Prepaid Expenses on...
Bill would expense the prepaid insurance by debiting insurance expense and crediting prepaid insurance account for $100. As you can see, Bill records theexpensesas he actually uses the insurance. By the end of his six-month policy, all of the prepaid account will be expensed and Bill will ...
Definition of Deferred Expense and Prepaid Expense Deferred expense and prepaid expense both refer to a payment that was made, but due to the matching principle, the amount will not become an expense until one or more future accounting periods. Most of these payments will be recorded as assets...
What is classified as a prepaid expense account? Answer and Explanation: Prepaid expenses are expenses that have been paid in advance yet will be used as an expense in the future. It is simply an expense that has already... Learn more about this topic: ...
Deferred revenue expenditure, or deferred expense, refer to an advance payment for goods or services. This is an advanced form of prepaid expenses. The arrangement is usually an agreement that the company will receive a service or goods in the future – but it pays for the goods or services...
What type of account is prepaid expense? What is the difference between an expense and an expenditure? What is the main difference between revenue and expense in accounting? Expenses are reported on what financial statement(s)? What is the adjusting entry to record $1200 of depreciation expense...
Definition of Prepaid Insurance Prepaid insurance is the portion of an insurance premium that has been paid in advance and has not expired as of the date of a company’s balance sheet. This unexpired cost is reported in the current asset account Prepaid Insurance. As the amount of prepaid ...