Financial Statements
Prepaid Expense
Definition
What is Prepaid Expense?
A payment made in advance for a future service or benefit.
Example in practice
How This Looks in Practice
A one-year insurance premium is initially recorded as a prepaid expense.
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Related Terms
Financial Statements
Revenue
Income generated from selling goods or services before expenses are deducted.
Financial StatementsSales Growth
The percentage increase or decrease in revenue over a period.
Financial StatementsCost of Goods Sold
Direct costs attributable to goods or services sold during a period.
Financial RatiosGross Margin
Gross profit expressed as a percentage of revenue.