AE for Prepaid Expenses

Q.

Does prepaid expenses effects the total of accounting equation? If yes, which accounts.

1. Yes, Assets & Capital

2. Yes, Liabilities & Capital

3. No

4. Yes, Assets & Liability

Q.

Prepaid expenses are considered as ________

1. Liabilities

2. Income

3. Expenses

4. Assets

Q.

If payment is made to a creditor, indicate how accounting equation will be affected?

Q. is/are considered as assets for a business entity.

1. Loan from bank
2. Prepaid expenses
3. Advance income
4. Bank overdraft

Q. Which of the following items would not fall under the definition of an asset?

1. Land
2. Machine
3. Cash
4. Owner Equity