Question : Expenses paid in advance are:
Option 1: deducted from the expenses paid during the year
Option 2: shown in debit of Income and Expenditure Account
Option 3: added to the expenses paid during the year
Option 4: shown as a liability in the Balance Sheet
Answer (1)
18th Jan, 2024
Correct Answer: deducted from the expenses paid during the year
Solution :
Expenses that are paid in advance are related to the following years hence, they are deducted from the expenses paid for the current year.
Hence, the correct option is 1.
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