Is a reduction in prepaid expenses a debit?

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1181383

2026-03-26 04:15

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No, a reduction in prepaid expenses is not a debit; it is a credit. Prepaid expenses are initially recorded as assets, and when they are utilized or expire, they are reduced through a credit entry, which reflects the expense incurred. This adjustment decreases the prepaid expense account and increases the corresponding expense account.

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