Expenses paid in advance at the end of the year are ________________ from the profit made during the year while preparing the cash flow statement.

Added Deducted Not treated None of these

Deducted

Prepaid expenses are deducted.Prepaid expenses are future expenses that are paid in advance and hence recognized initially as an asset. As the benefits of the expenses are recognized, the related asset account is decreased and expensed. The most common types of prepaid expenses are prepaid rent and prepaid insurance.