![]() Prepaid income is revenue received in advance but not yet earned. The two most common examples of prepaid expenses are rent and insurance. Prepaid expenses are initially recorded as assets, because they have future economic benefits, and are expensed at the time the benefits are realized (the matching principle). ![]() In other words, prepaid expenses are expenditures paid in one accounting period that will be recognized in a later accounting period. Prepaid expenses represent expenditures that have been paid for in advance but have not yet been recorded as an expense. The model calculates monthly amortization schedule for prepaid expenses and/or unearned income, generating relevant accounting entries. Prepaid unearned income revenue expense deferred insurance rent
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