In accounting for your expenses or prepaids on the income statement or balance sheet, these costs may be applicable to past, present or future periods. So what does that mean? Well, there are expenses that are considered expired costs. These expenses are costs that have no future benefit such as insurance expenses. They only apply to the period they benefit. Some other costs that are considered expired costs are cost of goods sold an period costs (selling, general and administrative costs) since these are only reflected in the period incurred.
Prepaid expenses on the other hand, are considered current assets, which belong on the balance sheet. Some examples are prepaid insurance and service contracts. These expire when they are 'used up' in that period.
Finally, unexpired costs are things such as fixed assets and inventory. They are on the balance sheet and are capitalized (depreciated). They will be eventually matched with future revenue. These are considered 'deferred' charges until they become an expense in the future.