What do we do with prepaid expenses while preparing Receipts and Payments Account?

Prepaid Expenses are debited

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Prepaid Expenses are credited

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Prepaid Expenses are added

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None of these

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Solution

The correct option is B
Prepaid Expenses are credited

Prepaid expenses are credited while preparing receipts and payments account as there is a cash outflow.

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Similar questions

What do you understand by prepaid expenses?

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