prepaid expense


An accounting term signifying money paid for goods or services upfront. A prepaid expense is considered an asset on the balance sheet. As the goods and services are delivered they are recorded on the income statement. An example of a prepaid expense is insurance, since the policy holder pays money upfront to cover the risk of possible damaging event occurring in the future.

Use prepaid expense in a sentence

It was a prepaid expense and that meant that they had to pay it, or things would not work out.

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I noticed that most expenses are prepaid expenses that makes life more expensive than the postpaid expenses hence making it more difficult.

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Make a list of expenses you will incur on your business trip and the company will determine which of these are prepaid expenses that we will pay before your trip commences.

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total current assets prepaid insurance