Question

Match the following items to their categories of accounts.

• A. Asset
• B. Liability
• C. Expense
• D. Revenue

Answer 1

• Prepaid rent is an asset as there are benefits that can be claimed in future.
• Rent payable is a liability as there is an obligation to pay the amount in future.
• Rent paid is an expense for the business as the benefits for the same is already claimed.
• Rent received is an income for the business.