Question

Describe the term Prepaid expenses
and explain the adjustment of same
in the financial statement with some
imaginary amount?​

Answer 1

Answer:

Prepaid expenses are future expenses that are paid in advance. On the balance sheet, prepaid expenses are first recorded as an asset.

Explanation:

Adjusting a company's financial statements to include the amounts of lease payments will provide an analyst with a more complete picture of the company's financial condition and enables meaningful comparison between companies having varying arrangements for financing assets.