Questions & Answer

?What is the difference between prepaid and accrued expenses


  • Prepaid expenses:-Expenses paid during the current period but related to the next financial period. Accordingly, on an accrual basis, these expenses are excluded from the balance of expenses shown in the balance of audit. This account is shown in the statement of financial position as an asset of the Company.
  • Accrued expenses:- Expenses that relate to the current period have not yet been paid and did not appear in the balance of expenses, according to the accrual basis, the expense is recognized and this account is shown in the statement of financial position in the liabilities side.