Difference Between Prepaid Expenses And Postpaid Expenses
The word "Prepaid" means paid before receiving the benefits, so Prepaid Expenses are those Expenses which are paid in advance against which the company still not received the benefits at the end of the accounting period. The word "Postpaid" mea ns paid after receiving the benefits, facilities, etc., so, Postpaid Expenses are those expenses which are incurred and against which the payment is not made but the services or benefits are received for the current accounting period. Prepaid Expenses are Current Assets while Postpaid Expenses are Current Liabilities . For Example, Internet Service Providing Companies offers Postpaid and Prepaid Packages. In postpaid facility, the user company pays the bill at the end of the month while in prepaid package, the user firstly paid the bill and then uses the services for the month.