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Jun 26, 2018 – Prepaid expenses are a common occurrence for small businesses. Expenses like insurance, prepaid service contracts and rent, should be . Prepaid expenses represent expenditures that have not yet been recorded by a company as an expense, but have been paid for in advance. In other words . Prepaid Insurance. Insurance premiums for corporate insurance policies are typically paid a year in advance. The advance payment is recorded on the balance sheet as a current asset. You would debit, or increase, the prepaid insurance account and credit, or decrease, the cash account. May 14, 2017 – An example of a prepaid expense is insurance, which is frequently paid . A best practice is to not record smaller expenditures into the prepaid . Sep 12, 2017 – The following list shows common examples of prepaid expenses: . the prepaid expenses journal entry in your books before using the good or . One good example is prepaid college plans, or the 529 Plan. . and deferred expense and how businesses use and record each in standard accounting . For example, insurance is a prepaid expense because the purpose of purchasing insurance is to . Typically determined on a prorated basis, prepaid interest is . Saving: One good prepaid expense example is rent where the company paid for next 12 months in advance. In other words, the company will be paying rent at . Check your knowledge of prepaid expenses in accounting using this short quiz. You’ll find out . What are some examples of services that are typically prepaid? Prepaid expense is expense paid in advance but which has not yet been incurred. Expense must be recorded in the accounting period in which it is incurred.