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Rent is paid for the month of April , 20...

Rent is paid for the month of April , 2019 in March , 2019 . The accounting year ended on 31st March , 2019 . The accountant has shown it on the assets side of the Balance Sheet. Has he given the correct treatment ? Give reasons.

Text Solution

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Yes , the accountant has given the correct treatment because rent for April , 2019 is a Prepaid Expense for the year ended 31st March , 2019 . Prepaid expenses are shown as an asset in the Balance Sheet.
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