Prepaid expenses: Are costs you pay up

Prepaid expenses are costs you pay up front for goods or services that you'll use in future accounting periods. See common examples and how to record them. Discover what prepaid expenses are, types, accounting treatment, examples, and differences between prepaid and accrued expenses. Essential guide for Indian businesses. A prepaid expense is an expense that is paid for in advance. Recurring expenses such as insurance and rent can be paid for with one payment that covers the cost of the expense for several months or even a year. Often, businesses prepay expenses in this manner because they can receive a discount. Prepaid expenses also provide a benefit to a business by relieving the obligation of payment for future accounting periods. In this manner, prepaid expenses are considered an asset. Anything that has ... Are you Looking to Know About Prepaid Expenses? Find What is it, Importance, Types, Examples and Best Practices. Read More