Prepaid expenses are shown ________________.

By way of addition in the Income statement

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As a current Asset

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As a fixed Asset

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As a current liability

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Solution

The correct option is B As a current Asset
Prepaid expenses are those expenses which are not incurred or due yet but are paid in advance by the company. Hence, any advance payment made by a company is an asset for the company. It is treated as current asset as it will be due within 12 months.

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Q. Which of the following are current assets of a business?
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The correct answer is?

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Prepaid expenses are shown ________________.

The correct option is B As a current AssetPrepaid expenses are those expenses which are not incurred or due yet but are paid in advance by the company. Hence, any advance payment made by a company is an asset for the company. It is treated as current asset as it will be due within 12 months.

The correct option is B As a current Asset
Prepaid expenses are those expenses which are not incurred or due yet but are paid in advance by the company. Hence, any advance payment made by a company is an asset for the company. It is treated as current asset as it will be due within 12 months.