prepaid expenses will become ________ when their future benefits expire.\na. expenses\nb. assets\nc…

Brief Explanations:

Prepaid expenses are initially recorded as assets because they represent future economic benefits. When these future benefits expire (i.e., the service or good for which the prepayment was made is consumed), the prepaid expense loses its asset - like nature. According to the matching principle in accounting, the cost should be recognized as an expense in the period when the benefit is used up. Assets (Option B) are incorrect because the future benefit has expired. Liabilities (Option C) are obligations, and prepaid expenses expiring is not creating an obligation. Revenues (Option D) are inflows of economic resources from the main operations of a business, which is not the case here.

Answer:

A. expenses