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

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