What are Buyer's Closing Costs and Prepaid Items

[Rick Lucette]

Hi All,

A friend of mine recently signed an offer to purchase a home. The seller agreed to the following terms: Seller will contribute to $X towards the buyer's closing costs and/or prepaid items. 

I told him that this was likely not a simple credit of $X but rather that that the seller would pay up to $X for closing costs and/or prepaid items. If so, he would like to know what would be considered as closing costs (for instance, closing costs typically include a reserve for taxes, or origination points?) and what are "prepaid items". 

Any help would be appreciated. thank you!!