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WAEC Financial Accounting 1991 (August) Question 46

Question 46

Final Accounts of a Sole Trader

Which of the following is not a liability?

  1. A.Accrued wages
  2. B.Creditor
  3. C.Prepayment
  4. D.Insurance due but unpaid
  5. E.Rent arrears
Show the answer and explanation

Answer: C (Prepayment)

Explanation

A prepayment is an amount paid in advance, a current asset.