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WAEC Financial Accounting 2025 Question 42

Question 42

Accruals and Prepayments

In a company's balance sheet, rent prepaid is classified as a

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

Answer: C (current asset.)

Explanation

A prepayment is a short-term benefit owed to the business, so it is a current asset.