Salaries (unless you run payroll in arrears) Estimated taxes. Examples of Prepaid Expenses. . For example, some companies require payment before a product is shipped, which is entered as a prepaid expense in the accounting records. (800) 342-8017. Another common example of prepayments is prepaid rent which is also initially recorded as prepaid asset and is charged to income statement as rent expense over the term of prepayment. Apr 05, 2022 Prepaid expenses can include, but are not limited to Rent Small business insurance Equipment Estimated taxes Some utility bills Interest expenses Businesses and individuals alike can have prepaid expenses. . Other common examples of prepaid expenses may include startup costs, advertising expenses, legal or consultant retainers, and annual office rent. Heres a look at some prepaid expenses examples Prepaid rent; Prepaid Insurance; Taxes; Interest payments ; Leased office equipment ; Salaries; Bulk supply orders ; Retainer for. There are several types of current assets, such as cash, accounts receivable, inventory, and prepaid expenses. . If a corporation pays 12,000 for a 12-month insurance policy, it would record a 12,000 current asset at the moment of payment to indicate this prepaid amount. Prepaid expenses are treated as an asset by the business. Nov 11, 2022 Prepaid expenses are recorded as current assets in a companys balance sheet when a payment is made. Notify General Accounting along with the completed prepaid expense form and they will relieve the charge out of the expense account 4040 to prepaid account A180 in the following fiscal year. . Company XYZ purchases a 6-month insurance policy for 1200 at the beginning of the year. . . . . There are several types of current assets, such as cash, accounts receivable, inventory, and prepaid expenses. . For example, 120,000 rent of a warehouse is expensed 10,000 monthly on a balance sheet. Examples. 3 million during the quarter, compared to 20. Another item commonly found in the prepaid. . Examples of prepayment include loan repayment before the due date, prepaid bills, rent, salary, insurance premium, credit card bill, income tax, sales tax, line of credit, etc. Because the benefit (aka insurance policy) does not go past a 12-month period or beyond the end of the taxable year following the year the payment was made, the 12-month rule applies. .