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Question
Pre-paid rent A/c appearing in Trial balance is treated as_________.
Pre-paid rent A/c appearing in Trial balance is treated as_________.
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Solution
The correct option is D Asset
Prepaid expenses are those expenses which have been paid in advance and related benefits are not consumed within the same accounting period. Examples-prepaid salary, prepaid rent, etc. Prepaid expenses are recorded in the books at the end of an accounting period to show true numbers of a business. Prepaid (Unexpired) expense is a personal account and is shown on the assets side of the balance sheet.
Prepaid expenses are those expenses which have been paid in advance and related benefits are not consumed within the same accounting period. Examples-prepaid salary, prepaid rent, etc. Prepaid expenses are recorded in the books at the end of an accounting period to show true numbers of a business. Prepaid (Unexpired) expense is a personal account and is shown on the assets side of the balance sheet.
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