Deferred expenses are recorded as assets on a balance sheet. Accountants consider deferred expenses to be assets because they will provide the company some good or service at a later point in time.

Insurance expense does not go on the balance sheet because it reflects a specific amount you have spent, rather than an asset or liability at a particular moment in time.

Prepaid expenses are first recorded in the prepaid asset account on the balance sheet. The GAAP matching principle prevents expenses from being recorded on the income statement before they incur.

The P&L reflects income and expenses over time, but the balance sheet shows the company's financial position within a single fixed moment," explains Courtney Barbee, owner and COO at The Bookkeeper.

Accumulated depreciation is the total amount of depreciation expense recorded for an asset on a company's balance sheet. It is calculated by summing up the depreciation expense amounts for each ...

A balance sheet shows a company's financial health at a specific point in time, its assets, liabilities and shareholders' equity. Skip to content. MEDIA; ... expenses and cash flows.