Question

Which of the following is an example of a prepaid expense?

a.Utilities have been incurred but not yet paid.
b.Rent has been purchased in advance.
c.Service was provided to a customer but not yet billed.
d.Interest is incurred through the passage of time.

Answer 1

Rent has been purchased in advance is an example of a prepaid expense.

Step-by-step explanation:

A prepaid expense is an expense that is paid in advance but has not yet been used or consumed. Out of the given options, Rent has been purchased in advance is an example of a prepaid expense. When a business pays rent in advance, it is considered a prepaid expense because the payment is made before the actual period of use or consumption.