The Reason for Recording a Prepaid Expense as a Current

question 26

Multiple Choice

The reason for recording a prepaid expense as a current asset is:

• A)that the prepaid item will be returned for a cash refund.
• B)that the prepaid item has not yet become an expense.
• C)that the expense has been incurred but not yet paid.
• D)to avoid recognizing an expense so net income will be higher for the current accounting period.

---

Definitions:

Planning

The process of thinking about and organizing the activities required to achieve a desired goal, involving the creation and maintenance of a plan.

Brainstem

A critical structure at the base of the brain connecting the cerebrum with the spinal cord, responsible for regulating basic life functions such as breathing, heart rate, and arousal.

Stimulating

To encourage or cause an increase in activity or interest, often in the context of mental or physical response.

Sexual Behavior

Actions and practices related to the expression of sexuality and sexual reproduction, varying widely among individuals and cultures.