Question 3
Final Accounts of a Sole TraderWhich of the following has a debit balance at the end of the year?
- A.Rates Prepaid Account
- B.Bank Loan Account
- C.Income Received in Advance Account
- D.Ordinary Share Capital Account.
Show the answer and explanation
Answer: A (Rates Prepaid Account)
Explanation
A prepayment is an asset, so it has a debit balance; the others are liabilities or capital.