Expenses paid in advance require what type of adjusting entry?

When expenses have incurred and have to pay it will be recorded as accrued expenses. When expenses not incurred and paid in advance, it will be treated as your current asset and would be accounted for on deferral basis.

Deferred expense is deferred asset and accrued expense is accrued liability. So, expense paid in advance is deferred asset. So, choice #2, deferral is the answer for this question.

2. Deferral ..,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Deferral.........................................................

The correct answer is:  2- Deferral

Cash paid before expense is incurred: Deferred expense .