Prepaid expenses are an asset of the firm. Do you agree?
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Recall that prepaid expenses are considered an asset because they provide future economic benefits to the company. The adjusting journal entry for a prepaid expense, however, does affect both a company's income statement and balance sheet.
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Answer:
Recall that prepaid expenses are considered an asset because they provide future economic benefits to the company. The adjusting journal entry for a prepaid expense, however, does affect both a company's income statement and balance sheet.
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