Multiple choice

Rent belonging to the month of April is paid in advance in March. In this case, the account to be debited is

  1. cash

  2. prepaid rent

  3. rent

  4. expenses
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Rent paid in advance is an asset because it represents a future benefit to the business. When this payment is made, the Prepaid Rent account is debited to show the increase in assets, and the Cash account is credited.

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