What Are Prepaid Expenses - Definition - Meaning- Examples - Explanation
Prepaid Expenses mean those Expenses which are paid by the business in advance but the benefits or services still not received by the business. The benefit / services will be received later on. Most of the Prepayments are Prepaid Expenses. Other name for Prepaid Expenses are Unexpired Expenses or Expenses paid in advance. Prepaid Expenses are also known as Deferred Expenses under Accrual Basis of Accounting . Examples are Prepaid Rent , Prepaid Fees, Prepaid Internet Bills, etc. Prepaid Expenses are categorized under Current Assets and shown on the Balance Sheet unless it is fully expired or utilized. Prepaid Expenses Journal Entry Example: Let say, we paid Advance Rent to rental company for 3 Month of Rs. 30000 (each month Rs. 10000). Now we need to record following Entry for Prepaid Rent: ...