A prepaid expense is the payment for services or goods that will benefit you at a future point in time. When the services or goods that were paid for in advance are utilized, it is at this point that the charge is expensed, or amortized on the income statement. For example, if I paid $1,200 for an insurance policy in Dec of 2011 for coverage over the calendar year 2012, I would have a prepaid expense of $1,200 on my balance sheet as of Dec 31, 2011. I would then amortize $100.00 to the income statement every month (for the coverage being provided to me), until eventually (at the end of the year-2012) the balance in my prepaid account would be zero and I would have amortized the entire $1,200 to the income statement at the rate of $100 per month.
Expenses are those amounts the benefit of which is already taken by business while prepaid expenses are advance payments for those expenses which company will incur in future.
i dont have any knowlege.....Nikita Gohil
Outstanding Expenses are expenses which are due at a specific point of time for example if the actual date to pay the rent is 1st july and we don't pay the rent till august end, then it is called the outstanding Expenses (outstanding rent) prepaid Expenses are expenses which are paid in advance for example if we paid the premium of Insurance in advance i.e before due date, then it calls the prepaid expenses.
prepaid expenses are paid in advance and they are called current assets.The outstanding expense is the unpaid money,still owed.
Outstanding expenses are the expenses which have fallen due at the end of the accounting period but which has not been paid. Its a liability for the company and will be shown under the Current liabilities and provisions. Prepaid expenses are the expenses which paid during the year before its due. The money is paid out but its not due at the end of the period. Its an asset and will be shown under current Assets in the Balance sheet.
Expenses are those amounts the benefit of which is already taken by business while prepaid expenses are advance payments for those expenses which company will incur in future.
i dont have any knowlege.....Nikita Gohil
what is the difference between freight prepaid and freight prepaid abroad
Outstanding Expenses are expenses which are due at a specific point of time for example if the actual date to pay the rent is 1st july and we don't pay the rent till august end, then it is called the outstanding Expenses (outstanding rent) prepaid Expenses are expenses which are paid in advance for example if we paid the premium of Insurance in advance i.e before due date, then it calls the prepaid expenses.
prepaid expenses are paid in advance and they are called current assets.The outstanding expense is the unpaid money,still owed.
Outstanding expenses are the expenses which have fallen due at the end of the accounting period but which has not been paid. Its a liability for the company and will be shown under the Current liabilities and provisions. Prepaid expenses are the expenses which paid during the year before its due. The money is paid out but its not due at the end of the period. Its an asset and will be shown under current Assets in the Balance sheet.
Expenses already incurred but not necessarily for the current accounting period is prepaid expense. In the case of advance, the expenses even though identified, have not been incurred but only cash has been taken out for the purpose of incurring such expense.
There isn't much of a difference between a prepaid expense and a deposit. Both terms are monies that are paid in advance to pay for something. With a prepaid expense, the money pays usually for a bill or utility. A deposit on the other hand, is sometimes given back after the obligation is paid. If it is not paid, the deposit is kept as payment.
one covers all college expenses, while the other covers only tuition
One covers all college expenses, while the other covers only tuition.
Prepaid is the same as fixed term!
When payment for insurance is made advance of actual expenses then it is called prepaid insurance which is asset for business until insurance benefit is utilized while insurance expense is actual insurance expense when insurance benefit is taken.