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WAEC Financial Accounting 1998 Question 10

Question 10

Final Accounts of a Sole Trader

Which of the following is an asset?

  1. A.Bad debt provision
  2. B.Rent in arrears
  3. C.Sales
  4. D.Accrued wages
  5. E.Insurance prepaid.
Show the answer and explanation

Answer: E (Insurance prepaid.)

Explanation

Insurance paid in advance is a benefit still to be received, so it is a current asset.