What type of account is "Prepaid Rent" classified as on the balance sheet?

Prepaid Rent is classified as a current asset on the balance sheet because it represents a payment that has been made in advance for rental space or property that will be utilized over the upcoming accounting periods. This advance payment effectively provides a future economic benefit to the business, as it allows the company to occupy or use the property during the rental period. In terms of cash flow, since the benefit of this payment will be realized within one year or within the current operating cycle, it is categorized as a current asset. This classification helps users of financial statements understand the resources that the company has available to generate revenues in the short term.