Is prepaid expenses an asset or liability?

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Is the prepaid expenses balance an asset or a liability in the statement of the financial position for a company? Is it a credit or a debit?

score 0 · Answer 1 · 2012-12-02T18:16:45+00:00

Prepaid expenses are expenses that have been paid but relate to a different period. They are assets since they will be consumed in a later period.