Question

Required information

[The following information applies to the questions displayed below.]
  

A company makes the payment of a one-year insurance premium of $3,096 on March 1, 2019.

e. Prepaid expenses reflects as an asset for more meaningful net income amount.

True or False

Answer 1

True
Prepaid expenses are those costs paid in advance for the expenses that are expected to be incurred in the future. They are reported under current assets section of balance sheet