📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    Prepaid Rent appearing in the Trial Balance is treated

    as:
    A An expense in the Profit & Loss Account. Correct Answer Incorrect Answer
    B A liability in the Balance Sheet. Correct Answer Incorrect Answer
    C An asset in the Balance Sheet. Correct Answer Incorrect Answer
    D A deduction from Rent in the Profit & Loss Account. Correct Answer Incorrect Answer
    E A contingent liability. Correct Answer Incorrect Answer

    Solution

    Since Prepaid Rent represents a benefit that will be exhausted in a future period, it is classified as a Current Asset on the Balance Sheet

    Practice Next
    More Forming base to Accounts Questions
    ask-question