Question

fill in the blank question when financial statements are prepared, unexpired prepaid accounts are recorded as (expenses/assets/liabilities) and the expired portion of the prepaid account is reported as a(n) (expense/asset/liability). need help? review these concept resources. read about the concept

Explanation:

• Prepaid accounts represent future economic benefits (unexpired portion), so they are classified as assets on financial statements, as assets are resources owned by a business with future value.
• The expired portion of a prepaid account is the amount that has been used up during the period, which matches the definition of an expense (costs incurred to generate revenue in a period).

Answer:

1. assets
2. expense