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WAEC Financial Accounting 2000 Question 23

Question 23

Accruals and Prepayments

Rent owing as at 31st December 1998 N800. Rent paid up to 31st December 1998 N1,700. Rent owing as at 1st January 1998 N500
The closing balance for 1998 is an item under

  1. A.current liability
  2. B.current asset
  3. C.long term liability
  4. D.fixed asset.
Show the answer and explanation

Answer: A (current liability)

Explanation

Rent owing at the year end is a current liability.