Accounts (Principles of Accounts)Accruals, prepayments and provisionsJAMB
Rent of ₦60,000 a year was charged, but ₦75,000 was paid during the year. The ₦15,000 difference is
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Answer: B. a prepaid expense
Paying more than the year's charge creates a prepayment, a current asset.
An AdmitMe practice question, written for the JAMB syllabus. Not an official past question.