Some times some part of amount paid for expenses relates to 
next financial year that amount is called prepaid expenses.
exampe.

vehicle insurance amt.to be paid 3000/- ( from 15.02.08 to 
15.04.08)
Rs.3000/- to be paid for two month but it include 15 days 
for next f/y. hence Rs. 750/ is prepaid expenses.

vehicle insurance Dr. 2250/-
prepaid exp.      Dr.  750/-
         Bank A/c       Cr 3000/-
(being amt. paid for insurence charges from 15.02.08 to 
31.03.08 and 15 days of april.)

Prepaid expense are those expenses which are paid in 
advance like our prepaid mobile connection's basicly its 
related to next accounting year.