NCERT · Class 11 · Accountancy · Financial Statements - IIPrepaid expense is treated as:
Step-by-Step Solution
Prepaid expense is an advance payment for future benefits and is treated as a current asset in the Balance Sheet.
Detailed Options Breakdown
Option : Current Liability
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Financial Statements - II.
Option 1: Current Asset (Correct Answer)
Correct choice. Refer to the step-by-step verified solution guidelines above for details.
Option 2: Expense
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Financial Statements - II.
Option 3: Income
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Financial Statements - II.
💡 Study Guide: This question tests core syllabus concepts from Financial Statements - II. For formulas, key summaries, and mock exam reference guides, read the full Financial Statements - II Revision Notes.