Prepaid Insurance is an expense account which is used for recording expenses that have been paid in advance.  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 True False

Prepaid Expenses are recorded as assets. True False

Define what is Prepaid expenses, Accrued expenses, Unearned revenue and Accrued revenue

Insurance paid ahead of time is a type of deferred Revenue. True False

1. Prepaid Rent Expense: This is an account in which businesses record payments for rent that will take place in the future. A prepaid rent expense is considered an asset for the business. When the rent is paid, it is initially recorded as a debit to the prepaid rents account. As the rent expense is gradually incurred over time, an adjusting entry is made to debit rent expense and credit prepaid rents. 2. Unearned Revenue: This is money received by a business for a product or service that it has yet to deliver. Unearned revenue is considered a liability for the business. When the money is initially received, it is recorded as a credit to the unearned revenues account. As the business delivers the product or service over time, an adjusting entry is made to debit unearned revenues and credit revenues. 3. Accrued Revenue: This is revenue that has been earned by a business for a product or service that it has delivered, but for which it has not yet received payment. Accrued revenue is considered an asset for the business. When the revenue is earned, it is recorded as a debit to the accrued revenues account. When the business eventually receives the payment, an adjusting entry is made to debit cash and credit accrued revenues. 4. Accrued Expense: This is an expense that a business has incurred, but for which it has not yet paid. Accrued expenses are considered liabilities for the business. When the expense is incurred, it is recorded as a debit to the relevant expense account and a credit to accrued expenses. When the business eventually pays the expense, an adjusting entry is made to debit accrued expenses and credit cash. Give examples