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Question
Give the word / term or phrase which can substitute the following statement.
Expenses which are paid before due.
Solution
Prepaid expenses
Explanation: Expenses which are paid before the due date are called prepaid expenses. These expenses are paid in advance as they are related to the next year but are paid during the current year itself. According to the matching concept, such expenses must be shown on the Assets side of the Balance Sheet.
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RELATED QUESTIONS
Pre-paid expenses are shown on the ....................... side of balance sheet.
- Assets
- Liability
- Debit
- Cash
Select the most appropriate alternative from those given below and rewrite the statement.
Prepaid expenses are shown on the __________________ side of the balance sheet.
State whether the following statement is True or False.
Prepaid expenses are shown on the asset side of the Balance Sheet.
State the meaning of Prepaid expenses
Show the treatment of prepaid expenses depreciation, closing stock at the time of preparation of final accounts when:
(a) When given inside the trial balance?
(b) When given outside the trial balance?
