A Prepaid Expense Occurs When a Company Pays in Advance

question 66

True/False

A prepaid expense occurs when a company pays in advance for a service or goods for which the benefit extends beyond the current accounting period.

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Definitions:

Outsourcing

The practice of hiring third-party companies or individuals to perform tasks, handle operations, or provide services that are either difficult to manage or are outside the company's expertise.

Employee Morale Risks

The potential negative effects on an organization's performance due to reduced employee satisfaction and engagement.

Bottom Line

The final net income reported by a company, indicating the company's profitability, or metaphorically, the most important or fundamental aspect of a situation.

Activities

Tasks or actions that are undertaken as part of a project or process.