Question

Prepaid accounts (also called prepaid expenses) are:

1) Assets
2) Liabilities
3) Equity
4) Expenses

Answer 1

Prepaid accounts, also known as prepaid expenses, are classified as assets on a balance sheet. They represent payments made in advance for goods or services that will be received in the future.

Step-by-step explanation:

A prepaid account, also known as a prepaid expense, is classified as an asset on a balance sheet. It represents a payment made in advance for goods or services that will be received in the future. Examples of prepaid expenses include prepaid rent, prepaid insurance, or prepaid subscriptions.