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UI Post-UTME Financial Accounting 2024 (Model questions) Question 16

Question 16

Accruals and Prepayments

Prepaid expenses is an item in

  1. A.Fixed Asset
  2. B.Current Asset
  3. C.Current Liabilities
  4. D.Long term liabilities
Show the answer and explanation

Answer: B (Current Asset)

Explanation

A prepayment is a benefit still to be received, shown as a current asset.