Discuss the Two Alternate Methods Used to Account for Prepaid

question 92

Short Answer

Discuss the two alternate methods used to account for prepaid expenses.

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Definitions:

Held-to-maturity

A classification for investment securities that a company has the intent and ability to hold until they mature, typically applicable to debt securities.

Bond Investment

A form of investment where an investor loans money to an entity, typically corporate or governmental, which borrows the funds for a defined period at a fixed interest rate.

Other Comprehensive Income

This includes revenues, expenses, gains, and losses that are excluded from net income on the income statement.