30+ VMR Solutions Interview Questions and Answers

Prepaid expenses are payments made in advance for goods or services that will be received in the future.

• Prepaid expenses are recorded as assets on the balance sheet

• They are initially recorded as a debit to prepaid expenses and a credit to cash or accounts payable

• As the prepaid expense is used up, it is recognized as an expense on the income statement

• Examples of prepaid expenses include rent, insurance, and subscriptions