Prepayments should be reported in the:
A)stockholders' equity section of the balance sheet.
B)income statement.
C)current assets section of the balance sheet.
D)current liabilities section of the balance sheet.
E)long-term liabilities section of the balance sheet.

Question

Quizplus · Accepted Answer

Prepayments are considered current assets because they represent a cash outflow that will provide future economic benefits in the form of goods or services. Therefore, they should be reported in the current assets section of the balance sheet.

Prepayments Should Be Reported in The