Prepaid Expenses Are

question 98

Multiple Choice

Prepaid expenses are

• A)Always debited to an expense account.
• B)Payments made for economic benefits that never expire.
• C)Generally all combined into one account called "Miscellaneous Expenses".
• D)Classified as liabilities on the balance sheet.
• E)Assets created by payments for economic benefits that are not used up until later.

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Definitions:

Common Shareholders

Individuals or entities that own a portion of a company's equity through its common shares, giving them voting rights and a claim on a portion of its profits.

Payout Ratio

The proportion of earnings paid out as dividends to shareholders, typically expressed as a percentage of the company's total net income.

Current Dividends

Dividends that are declared and paid to shareholders out of a company's current earnings or accumulated profits.

Future Dividends

Expected payments made by a corporation to its shareholder members based on future earnings, typically projected by the company’s management or analysts.