Question

Prepaid expenses have a.not yet been paid nor recorded as expenses b.not yet been paid but recorded as expenses c.not yet been recorded as expenses but have been paid d.been recorded as expenses and paid

Answer 1

Prepaid expenses are represented as assets that have been paid for but have not yet been recognized as expenses in the financial statements.

Step-by-step explanation:

Prepaid expenses are recorded in the accounting records as assets when they have been paid but not yet incurred as expenses. The correct answer to the question is c. not yet recorded as expenses but have been paid. In accrual accounting, which is the basis of generally accepted accounting principles (GAAP), expenses are recorded when they are incurred, not necessarily when they are paid. Prepaid expenses are a type of asset on the balance sheet that represents services or goods that are to be consumed in a future period. Over time, as the benefit of the prepaid expense is realized, it is then expensed.

Answer 2

c.not yet been recorded as expenses but have been paid

Step-by-step explanation:

Prepaid expense is a current asset that arises when an entity pays in advance for an expense to be incurred later.

Examples include insurance, rent paid in advance etc.

Hence, Prepaid expenses have not yet been recorded as expenses but have been paid.