Prepaid Expenses

Prepaid Expenses is a sort of asset that arises over a balance sheet caused by business making payments for goods and services to get received soon. While prepaid expenses are initially recorded as assets, their value is expensed with time as the profit is received upon the income assertion, because unlike standard expenses, the business will probably receive something of value soon. The amount of prepaid expenses that contain not yet out of date are reported over a company’s balance sheet just as one asset. As the amount expires, the asset will be reduced and an expense is recorded for the amount of the reduction.