What are Prepaid expenses?

Please explain what are Prepaid expenses?

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Prepaid expenses on the balance sheet represents the current asset.

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We pay someone for the services we seek from them at present or in future.

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Prepaid Expenses are amounts that are paid in advance to a vender or creditor for goods and services. Typically, insurance premiums are paid in advance of the coverage contained in the policy. Prepaid Expenses is a Current Asset for our business. This is because we have paid for something and someone owes us the service or the goods for which we prepaid. Source:

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